96-06 HRA Resolution
Resolution 96-6
December 17, 1996
. Commissioner Anderson introduced the following resolution and moved its
adoption:
RESOLUTION APPROVING SALE OF CERTAIN REAL
PROPERTY IN THE GOLDEN HILLS REDEVELOPMENT AREA
TO MEPC AMERICAN PROPERTIES, INC.
(THIRD MEPC PRIVATE DEVELOPMENT AGREEMENT)
WHEREAS, the Housing and Redevelopment Authority in and for the City
of Golden Valley, Minnesota (hereinafter referred to as the "HRA"), and the City
Council of the City of Golden Valley, Minnesota have approved the Golden Hills
Redevelopment Plan; and
WHEREAS, the Golden Hills Redevelopment Plan contemplates the
redevelopment of the West Area in office, office warehouse, office service and
light manufacturing; and
.
_ WHEREAS, MEPC American Properties, Inc. a Delaware Corporation
(hereinafter referred to as "developer") has made a proposal for the construction
of an 78,500 sq. ft. office/warehouse, and either an 86,300 sq. ft.
office/warehouse or a (minimum) 65,000 sq. ft. office building; and
WHEREAS, the HRA has reviewed the terms of the proposal made by the
Developer and they appear to be reasonable and within the overall guidelines for
redevelopment of the Golden Hills Redevelopment Area; and
WHEREAS, the HRA has determined the use value of the real property
contemplated by the Developer's proposal; and
WHEREAS, pursuant to Minnesota Statutes S469.029 the HRA has duly
given notice in the form attached as Exhibit A of a public hearing on the
proposed sale of the property legally described therein (hereinafter the "Subject
Property"); and
WHEREAS, the development agreement, among other things, proposes
to replat the property described in the notice as Lot 1, Block 1, and Lot 1, Block
2, Golden Hills West Fourth Addition, Hennepin County, Minnesota; and
WHEREAS, said public hearing noticed for December 11, 1996 was
continued and held on December 17,1996 at 7:00 PM.
NOW, THEREFORE, BE IT RESOLVED, that the HRA does hereby make
. the following findings and determinations:
1. Proper published notice of the proposed sale of the Subject Property
described above has been given and a public hearing has been held thereon, all
in accordance with the provisions of Minnesota Statutes S469.029; and,
Resolution 96-6 - Continued
December 17, 1996
. 2. The use of the Subject Property proposed by the Developer is
reasonably within the overall guidelines of the Golden Hills Redevelopment Plan;
and,
3. The use value of the Subject Property is hereby established as $2.85
per sq. ft. for Lot 1, Block 1 and $4.50 for Lot 1, Block 2; and,
4. In consideration of the restrictions on the sale and use of the Subject
Property imposed by Minnesota Statute 9469.029 and the restrictions imposed
by the Golden Hills Redevelopment Plan, sale of the Subject Property to the
Developer at $2.85 per sq. ft. and $4.50 per sq. ft. is appropriate.
BE IT FURTHER RESOLVED that:
1. The sale of Subject Property to the Developer on the terms and
conditions set forth in the development agreement attached hereto as Exhibit B
is hereby approved; and
.
2. The Chair of the HRA and the Director of the HRA are hereby
authorized to execute the necessary documents and close the sale of the
Subject Property to the Developer pursuant to the terms and restrictions
provided hereby; and
3. The Director of the HRA is hereby authorized and empowered to
perform the obligations imposed on the HRA under the private development
agreement.
ATTEST:
.
ne , Director
f
/
Motion for ~ adoption of the foregoing resolution was seconded by
Commissioner Russell; and upon a vote taken thereon, the following voted in
favor thereof: Anderson, Johnson, LeSuer, Micks and Russell; and the following
voted against the same: none, whereupon said resolution was declared duly
passed and adopted, signed by the Chair and her signature attested by the
Director.
.
.
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Resolution 96-6 - Continued
EXHIBIT A
December 11, 1996
NOTICE OF PUBLIC HEARING
(APPROVAL OF SALE OF CERTAIN REAL PROPERTY TO
MEPC AMERICAN PROPERTIES, INC. FOR REDEVELOPMENT)
NOTICE IS HEREBY GIVEN that the Housing and Redevelopment
Authority (HRA) of Golden Valley, Minnesota will meet at the Golden Valley City
Hall, Council Chambers, 7800 Golden Valley Road, on Wednesday, December
11, 1996 at 7:00 PM and will then and there consider the sale and terms of sale
of the following described tract located south of Laurel Avenue, east of Colorado
Avenue and north of 1-394 in Golden Valley, Minnesota, to MEPC American
Properties, Inc., for redevelopment pursuant to Minnesota Statutes Section
469.029. The legal description is as follows:
Lots 1-9, Block 1, Merchant's Industrial Park
Lots 1 and 2, Block 1, Merchant's Industrial Park 2nd Addition
A portion of the southerly 665 feet of Government Lot 3, Section 4, Range
117, Township 21, lying east of Colorado Avenue.
The proposal is to construct two buildings, the first a 78,500 sq. ft. office
warehouse facility and the second either an 86,300 sq. ft. office warehouse
building or an office facility with a minimum of 65,000 sq. ft. All interested parties
may appear in person or by counsel and be heard.
BY THE HOUSING AND REDEVELOPMENT AUTHORITY
/s/ Wi,lIiam S. Joynes, HRA Director
~olution 96-6
EJ '3fT B
December 1
996
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THIRD MEPC PRIVATE DEVELOPMENT AGREEMENT
THIS AGREEMENT. effective as of , 1996, is made and entered into by
and between THE HOUSING AND REDEVELOPM~NT AUTHORITY IN AND FOR THE
CITY OF GOLDEN V ALLEY. a public body corporate established and existing under
Minnesota Statutes. Section 469.001 et ~., with its principal offices at 7800 Golden Valley
Road, Golden Valley, Minnesota 55427 (the "HRA"), and MEPC AMERICAN
PROPERTIES, INC., a Delaware corporation with its Minnesota office located at 1550 Utica
Avenue South. Suite 120, Minneapolis, Minnesota 55416 ("Developer").
WHEREAS, the HRA and the City of Golden Valley (the "City") adopted the Golden
Hills Redevelopment Plan (the "Plan") in October of 1984, and have since made certain
amendments thereto, for the purpose of redeveloping approximately 100 acres located in the
City of Golden Valley (the "Redevelopment Area"); and
WHEREAS, the Redevelopment Area has been designated as a tax increment district
pursuant to applicable Minnesota statutes; and
.
WHEREAS. the Plan is intended to encourage private development of the
Redevelopment Area through various forms of government aid and fmancial assistance; and
WHEREAS, Developer has submitted to the HRA a proposal for the development of
(a) an office/warehouse facility with approximately 78,500 square feet, plus (b) an
office/warehouse facility with a minimum of approximately 86,300 square feet or an office
building with a minimum of approximately 65,000 square feet (the "Project"), on a site in
the Redevelopment Area legally described in attached Exhibit A (the "Development
Property"); and
WHEREAS, prior to the closing of Developer's purchase of the Development
Property from the HRA, the HRA shall replat the Development Property into two separate
lots (Lot 1, Block 1. Golden Hills West 4th Addition, for 78,500 square foot
office/warehouse facility, and Lot 1, Block 2, Golden Hills West 4th Addition, for the other
building), which lots shall be divided by a road as shown on the sketch attached as Exhibit
B.
WHEREAS, the HRA, after public hearing, has approved the Project as being
consistent with the provisions of the Plan; and
WHEREAS, Minnesota Statutes, Section 469.029, requires the adoption of a
development agreement between the parties setting forth the mutual rights and obligations of
the parties.in accordance with the provisions of the Plan;
.
NOW, THEREFORE, in consideration of the foregoing, and in consideration of the
mutual terms and conditions contained herein, the parties hereby agree as follows:
.
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'olution 96-6
ARTICLE I
ARTICLE II
ARTICLE ill
ARTICLE IV
ARTICLE V
ARTICLE VI
ARTICLE VII
EX
'ITa
December l'
396
TABLE OF CONTENTS
Pa~e
DefInitions
Section 1.1.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 1
DefInitions . . . . . . . . . . . . . . . . . . . . . . . . " 1
Representations and Warranties; Preliminary Activities . . . . . . . " 4
Section 2.1. Representations and Warranties by the HRA ..... 4
Section 2.2. Representations and Warranties by Developer. . . " 5
Section 2.3. Preliminary Activities . . . . . . . . . . . . . . . . . .. 6
Title and Other Maners . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
Section 3.1. Marketable Title ...................... 7
Section 3.2. Replatting. . . . . . . . . . . . . . . . . . . . . . . . .. 7
Section 3.3. Condemnation of the Development Property ..... 8
Section 3.4. Environmental Maners .................. 8
Section 3.5. Real Estate Taxes and Special Assessments ...... 8
Section 3.6. Deed. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 9
Section 3.7. Recording. . . . . . . . . . . . . . . . . . . . . . . . .. 9
Section 3.8. Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 9
Section 3.9. Condemnation. . . . . . . . . . . . . . . . . . . . .. 10
Section 3.10. Guaranty.......................... 10
Construction of Improvements . . . . . . . . . . . . . . . . . . . . . .. 10
Section 4.1. Construction of Improvements . . . . . . . . . . . .. 10
Section 4.2. Commencement and Completion of Construction.. 10
Section 4.3. CenifIcate of Completion. . . . . . . . . . . . . . .. 12
Section 4.4. Deposit and Reimbursement of HRA Expenses. .. 12
Section 4.5. Escrow Agreement . . . . . . . . . . . . . . . . . . .. 13
Assessment Agreement and Payment of Taxes ............. 14
Section 5.1. Execution of Assessment Agreement . . . . . . . .. 14
Section 5.2. Payment of Taxes, Assessments, Etc. ........ 15
Section 5.3. Minimum Tax Increment . . . . . . . . . . . . . . .. 15
Section 5.4. Return of Purchase Price . . . . . . . . . . . . . . .. 16
Insurance ................................... 16
Section 6.1. Insurance. .. .. . .. .. . .. . . . . .. .. . '" 16
Undertakings of the HRA . . . . . . . . . . . . . . . . . . . . . . . . .. 18
Section 7.1. Sale of Development Property . . . . . . . . . . . .. 18
Section 7.2. Limitations on Financial Undertakings of the HRA 19
Section 7.3. HRA to Maintain Existence .............. 19
Section 7.4. HRA's Option to Terminate .............. 19
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r olution 96-6
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EX' IT B
December 1: )96
ARTICLE vm
ARTICLE IX
ARTICLE X
ARTICLE XI
.
ARTICLE XII
Exhibits:
A
B
C
.
D
E
F
G
H
I
J
K
Mongage Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20
Section 8.1. Approval of Mongage . . . . . . . . . . . . . . . . .. 20
Section 8.2. Notice of Default; Copy to Mongagee . . . . . . .. 20
Section 8.3. Mongagee's Option to Cure Defaults. . . . . . . .. 20
Section 8.4. HRA's Option to Cure Default on Mongage .... 21
Section 8.5. Subordinate Liens .................... 22
Restrictions on Transfer; Indemnification ................ 22
Section 9.1. Restrictions on Transfer . . . . . . . . . . . . . . . .. 22
. Section 9.2. IndemnIfication... . . . . . . . . . . . . . . . . . .. 23
Events of Default .............................. 23
Section 10.1. Events of Default Defmed ............... 23
Section 10.2. Remedies on Default .................. 24
Section 10.3. No Remedy Exclusive . . . . . . . . . . . . . . . . .. 25
Section 10.4. No Additional Waiver Implied by One Waiver . .. 26
Additional Provisions ............................ 26
Section 11.1. Equal Employment Opportunity . . . . . . . . . . .. 26
Section 11.2. Not for Speculation ................... 26
Section 11.3. Titles of Anicles and Sections . . . . . . . . . . . .. 26
Section 11.4. Notices and Demands . . . . . . . . . . . . . . . . .. 26
Section 11.5. Counterparts ....................... 26
Section 11.6. Modification ....................... 27
Section 11.7. Interpretation and Amendment . . . . . . . . . . . .. 27
Section 11.8. Severability........................ 27
Section 11. 9. Duration.......................... 27
Section 11.10. Binding Effect ...................... 27
Section 11.11. Consents . . . . . . . . . . . . . . . . . . . . . . . . .. 27
Section 11.12. Certificates ........................ 27
Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . .. 27
Section 12.1. Developer's Options to Terminate. . . . . . . . . .. 27
Section 12.2. Effect of Termination . . . . . . . . . . . . . . . . .. 28
Legal Description
Sketch of Development Property
Assessment Agreement
C-1 Legal Description
C-2 Assessor's Certification
Certificate of Completion
Development Plans
Demolition Specifications
Limited Warranty Deed
Pond Easement Agreement
Guaranty
Access and Signage Easement
Escrow Agreement
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P 'Jlution 96-6
EXJ ~r B
December 17
196
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly
appears from the context:
" Agreement" means this Third Private Development Agreement by and between The
Housing and Redevelopment Authority in an~ for the City of Golden Valley, Minnesota, and
MEPC American Ptopenies, Inc., a Delaware corporation, as the same may be from time to
time modified, amended or supplemented.
"Assessment Aereement" means the separate assessment agreement to be executed by
the HRA and Developer for each of Lot 1 and Lot 2 of the Development Property, and
cenified by the Assessor for Hennepin County, pursuant to the provisions and requirements
of Minnesota Statutes, Section 469.177, Subdivision 8, establishing the Assessor's Minimum
Market Value for the Improved Parcel, a copy of which is attached hereto as Exhibit C.
"Assessor's Minimum Market Value" means the agreed minimum market value for
calculation of real estate taxes certified by the Assessor for Hennepin County for each
Improved Parcel pursuant to the Assessment Agreement.
"Cenificate of Completion" means the separate cenification for each of Lot 1 and Lot
2 of the Development Property, in the form of the cenificate contained in Exhibit 0 attached
to and made a part of this Agreement, provided to Developer pursuant to Section 4.3 of this
Agreement upon satisfactory completion of the Improvements for each such Lot.
"Citv" means the City of Golden Valley, Minnesota.
"Closine Date" means the date upon which the HRA conveys title and possession to
the Development Property to Developer, which shall be on or after the date (a) the HRA has
acquired title to all of the Development Property, (b) the Parties have obtained all necessary
consents and approvals required for construction of the Improvements, and (c) the HRA has
completed, at its expense, the remediation of any Hazardous Substances on the Development
Property, or has provided assurances reasonably acceptable to Developer that such
remediation will be completed in a manner which will not create any material expense,
liability or delay for Developer. The Parties expect the Closing Date to be on or about
December I, 1997 if the HRA acquires the Development Property by quick-take
condemnation, or May 1, 1998 if the HRA acquires the Development Property by regular
condemnation.
If the HRA acquires a significant portion, but not all, of the Development Property
and incurs a delay in completing the acquisition of the remainder, either Party may request
the other Party to agree to an amendment to this Agreement and complete a partial closing
on that ponion of the Development Property which the HRA has acquired, and the other
Party shall consider the request reasonably and in good faith.
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olution 96-6
EX
ITB
December 1', .396
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"County" means the County of Hennepin, Minnesota.
"Develooer" means MEPC American Propenies, Inc., a Delaware corporation, and
its successors and assigns under this Agreement.
"Develooment Plans" means the plans, specifications, drawings, and related
documents on all construction work to be performed by Developer on the Development
Propeny, including all on-site improvements to be performed, installed or constructed upon
the Development Propeny pursuant to this Agreement. Such plans include, for each building
or other structure to" be constructed on the Development Propeny, at least the following: (i)
site plan; (ii) floor plan for each floor; (iii) elevations (all sides) and exterior materials; and
(iv) landscape plan. The Development Plans are attached as Exhibit E and are hereby
approved. The Development Plans for Lot 2 include both development options but are
limited to a site plan. The final Development Plans for Lot 2 require HRA approval prior to
the commencement of construction. The Development Plans shall exhibit a quality of
construction consistent with the building constructed by Developer on an adjacent parcel for
Cyberoptics Corporation. No changes, except those deemed minor by the HRA Director,
shall be made to the Development Plans without prior written approval by the HRA.
.
"Develooment PropertY" means the real propeny described in Exhibit A of this
Agreement. Prior to the Closing Date, the HRA shall replat the Development Propeny into
two separate lots (Lot 1, Block 1, Golden Hills West 4th Addition, for the 78,500 square
foot office/warehouse facility, and Lot 1, Block 2, Golden Hills West 4th Addition for the
other building).
"Event of Default" means an action by Developer listed in Section 10.1 of this
Agreement.
"First Monl!al!e" means any first priority mongage which is secured, in whole or in
pan, by Developer s interest in the Development Propeny, or any ponion or parcel thereof,
or any Improvements constructed thereon. and which is a permitted encumbrance pursuant to
the provisions of Anicle VIII of this Agreement.
"Hazardous Substances", as used in this Agreement, means pollutants, contaminants,
toxic or hazardous waste or any other substances, the removal of which is required or the use
of which is restricted, prohibited or penalized by "Environmental Law", which term means
any federal, state or local law or ordinance relating to pollution or the protection of the
environment and includes without limitation asbestos, petroleum products and underground
storage tanks.
"Holder" means the owner of the First Mongage.
.
"HRA" means The Housing and Redevelopment Authority in and for the City of
Golden Valley.
"Imoroved Parcel" means each of Lot 1 and Lot 2 in the Development Propeny and
the completed Improvements hereon.
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~ 1olution 96-6
EY lIT B
December 1
996
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"Improvements" means (a) an office/warehouse facility for Lot 1 containing a
minimum of 78,500 square feet, approximately 50 percent office and 50 percent warehouse,
and (b) at Developer's option for Lot 2, either an office/warehouse facility containing a
minimum of 86,300 square feet, with no less than 50 percent office and the remainder
warehouse, or an office building with a minimum of approximately 65,000 square feet, plus
in each case all other improvements, including fixtures and equipment, to be constructed by
Developer upon the Development Property pursuant to this Agreement, as such
improvements are defmed in the Development Plans.
"Lot" means Lot 1 or Lot 2.
"Lot 1" means Lot I, Block 1, Golden Hills West 4th Addition.
"Lot 2" means Lot I, Block 2, Golden Hills West 4th Addition.
.
"Net Proceeds" means any proceeds paid by an insurer to Developer, the Holder of
the First Mortgage, or the HRA under a policy or policies of insurance to be provided and
maintained by Developer pursuant to Article VI of this Agreement and remaining after
deducting all expenses (including reasonable fees and disbursements of counsel) incurred in
the collection of such proceeds.
"Parties" means the HRA and Developer.
"fim." means either the BRA or Developer.
"Plan" means the Golden Hills Redevelopment Plan, adopted by the City and the
HRA in October of 1984, and as amended through the date hereof.
"Project" means the construction and operation of the Improvements by Developer on
the Development Property pursuant to the terms of this Agreement.
"Purchase Price" means the sum of (a) $2.85 per square foot for Lot 1, and (b)
$4.50 per square foot for Lot 2, not including the road dividing the two Lots.
"Redevelooment Area" means the approximately 100 acres located in Golden Valley,
Minnesota that are subject to the Plan.
"State" means the State of Minnesota.
"Tax Increment District" means the Redevelopment Area.
"Tax Increment FinancinlZ Act" means the statutes located at Minnesota Statutes,
Sections 469.174 through 469.179, inclusive, as amended.
.
"Tax Increment FinancinlZ Plan" means the Tax Increment Financing Plan for City of
Golden Valley.
...
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r 'olution 96-6
EX' 'IT B
December 1 ~
196
"Tax Official" means any City or County Assessor; County Auditor; County or State
Board of Equalization; the Commissioner of Revenue of the State; or any State or Federal
District Coun, the Tax Coun of the State or the State Supreme CoUtt.
"Unavoidable Delavs" means actual delays due to events directly affecting the Project
which are beyond the control of the Panies, including but not limited to actions of
governmental authorities other than the City or the HRA. labor disputes, unusually severe or
prolonged bad weather. :lcts of God, civil disturbances. accidents. fire or other casualty,
shortage of labor or materials, injunctions, ~r other coun or administrative orders.
ARTICLE II
Reoresentations and Warranties: Preliminarv Activities
Section 2.1. Reoresentations and Warranties bv the HRA. The BRA represents and
warrants that:
(a) The HRA has the power to enter into this Agreement and carry out its
obligations hereunder.
(b) Subject to its right to terminate this Agreement pursuant to Section
7.2(e), the HRA has the financial capacity to perform its obligations under this
Agreement.
(c) The Redevelopment Area constitutes a Redevelopment Project pursuant
to Minnesota Statutes, Section 469.002. and a Tax Increment District pursuant to
Minnesota Statutes. Section 469.042. and is an "existing project" pursuant to
Minnesota Statutes, Se~tion 469.179.
(d) The HRA has examined this Agreement. and has determined that its
terms and provisions are in accordance with the objectives embodied in the Plan, and
are in the best interests of the City and its residents.
(e) The Project, as defmed and described in this Agreement, is in
conformance with the Plan.
(t) There are no legal proceedings pending, or known to be threatened or
contemplated, to which the HRA is a party, or to which any propeny of the HRA is
subject, which, if determined adversely. would individually or in the aggregate have a
material adverse effect on the HRA's fmancial position, or prevent or impair the
HRA's ability' to perform any covenants or obligations under this Agreement.
(g) The HRA shall act in good faith and use reasonable efforts to obtain all
consents and approvals required for its acquisition of the Development Propeny and
the performance of its other obligations under this Agreement.
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~ 'Solution 96-6
El liT B
December 1
996
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The above representations and warranties are true and complete as of the date hereof. shall
be true and complete as of the Closing Date. and shall survive the Closing Date.
Section 2.2. Representations and Warranties bv DeveloDer. Developer represents
and warrants that:
(a) Developer is a corporation duly organized under Delaware law and in
good standing under the laws of the State of Delaware.
(b) Developer is not in viofation of any provisions in its Articles of
Incorporation or Bylaws, has power to enter into this Agreement and to perform its
obligations hereunder and has duly authorized the execution, delivery and
performance of this Agreement by proper action. such that this Agreement is and
shall remain binding and enforceable against Developer according to its terms, subject
to laws affecting the rights of creditors generally or principles of equity.
.
(c) Neither the execution and delivery of this Agreement. the
consummation of the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement is prevented or limited
by, or in conflict with or will result in a breach of. the terms, conditions or
provisions of Developer's Articles of Incorporation or Bylaws, as amended. or any
indenture, mongage. agreement or instrument of whatever nature to which Developer
is now a pany or by which it is bound, or will constitute a default under any of the
foregoing.
(d) There are no legal proceedings pending, or known to be threatened or
contemplated. to which Developer is a pany, or to which any propeny of Developer
is subject. which. if determined adversely, would individually or in the aggregate
have a material adverse effect on Developer's financial position, or prevent or impair
Developer's ability to. perform any covenants or obligations under this Agreement.
(e) Developer has previously delivered to the HRA copies of its most
recent financial statements, prepared in accordance with generally accepted accounting
princ;'~les; since the date of such statements, there have been no changes in
Developer's financial condition which would have a material adverse effect on
Developer, or which would prevent or impair Developer's ability to perform any
covenants or obligations under this Agreement.
(t) Developer shall act in good faith and use reasonable efforts to obtain all
consents and approvals required for construction of the Improvements, and Developer
shall comply with all reasonable requirements imposed as conditions for such consents
and approvals even if such requirements involve changes to the Development Plans
(so long as such changes are not substantial).
.
The above representations and warranties are true and complete as of the date hereof, shall
be true and complete as of the Closing Date. and shall survive the Closing Date.
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p ~olution 96-6
EX' "IT B
December 17 196
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Section 2.3. Preliminary Activities. Promptly after the execution of this Agreement
by both Parties. the HRA , after consultation with Developer, shall prepare a work plan and
estimated budget for each of the following activities, and commence and proceed diligently to
complete such activities on or before May 15, 1997, subject to the HRA's legal right to do
so:
(a)
Property;
Obtain appraisals of each of the separate parcels in the Development
(b) Obtain (after court proceedings under Minn. Stat. Sec. 117.041 if
necessary) Phase I and Phase II environmental reports on each of the separate parcels
in the Development Property, and deliver copies of such reports to Developer;
(c) Prepare, after consultation with Developer, a remedial action plan for
remediation of any Hazardous Substances discovered on the Development Property as
a result of the Phase I and Phase II reports, if the HRA reasonably determines that the
Minnesota Pollution Control Agency (ltMPCA") is likely to require such a plan, and
deliver a copy of the plan to the MPCA and Developer, and also deliver a copy of
any responses from the MPCA to Developer:
.
(d) Retain a relocation consultant to begin work concerning the relocation
of current occupants of the Development property;
(e) Obtain and deliver to Developer a survey from a registered land
surveyor showing the Development Property to the nearest hundredth of a square
foot, and also showing all easements of record or in use, all roads and encroachments
and any gaps or overlaps;
(t) Obtain after review and approval by Developer of the scope of the
work, a geotechnical soil analysis of a reasonable sample of the Development
Property, assuming construction of an 86.300 square foot office/warehouse facility on
Lot 2, and deliver a copy of the analysis LO Developer, together with a statement of
the maximum amount to be reimbursed to Developer for soil correction pursuant to
Section 4.2;
(g) Obtain and deliver to Developer a commitment for the issuance of an
owner's AL T A policy of title insurance with respect to the Development Property,
together with copies of any referenced documents, issued by an acceptable title
insurance company showing marketable title in the HRA subject only to the following:
(i) Building, zoning and similar laws and ordinances;
(ii) Mineral rights reserved to the State of Minnesota;
.
(iii) Easements of record which will not interfere with Developer's
proposed development and use of the property:
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r ')Iution 96-6
EXr ~B
December 1i
)96
(iv) The lien of current real estate taxes, if any;
(v) The rights of fee owners, lienors and encumbrancers which
the HRA shall terminate prior to the Closing Date;
(vi) Other restrictions. if any, expressly agreed to by Developer,
including those restrictions and reversionary rights contained in this
Agreement.
The comminnent shall include searches for bankruptcies; state and federal judgments;
tax and other liens; and for all special assessments, levied, pending (approved by the City
Council), or deferred. The commitment shall include full mechanic's lien coverage, shall
delete any exceptions for the rights of panies in possession and survey matters, and shall
include copies of all documents referred to therein. The cost and expense of the title
commitment and the title policy, based upon the Purchase Price only, shall be paid by the
HRA. Any other title costs or policies, including costs for extended coverages. shall be paid
by Developer.
On or before the later of (a) May 15, 1997, or (b) the date which is 20 days after the
date of receipt by the Panies of the written response by the MPCA to the remedial action
plan referred to in paragraph (c) above (the "Commitment Date"), either Party may elect to
terminate this Agreement for any reason or no reason. and without liability to the other Party
except to the extent of any prior breaches or defaults under this Agreement by the
terminating Party. Such termination shall be effected by delivery of a written notice to the
other Party in the manner provided in Section 11.4.
ARTICLE III
Title and Other Matters
Section 3.1. Marketable Title. Developer shall be allowed 30 days to make
objections to the title insurance commitment described in Section 2.3, such objections to be
made in writing or deemed waived. The HRA shall be permitted 90 days to cure the same
and the HRA hereby undenakes to cure such defects. If such title objections cannot be cured
within 90 days or such longer period as is agreed to by Developer, and Developer does not
waive such objections, then Developer shall have the right to terminate this Agreement by
giving written notice thereof to the HRA. The Closing Date shall be extended to the extent
necessary during such period.
Section 3.2. Reolatting. Prior to the Closing Date, the HRA shall replat the
Development Property into two separate lots, Lot 1, Block 1, Golden Hills West 4th
Addition, for the 78,500 square foot office/warehouse facility, and Lot 1, Block 2, Golden
Hills West 4th Addition, for the other building, which lots shall be divided by a road as
shown on the sketch attached as Exhibit B. The replatting shall be reasonably consistent with
the approved Development Plans. The HRA shall consult with Developer regarding the final
location of the road and replatting of the Development Property and shall give Developer.s
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wishes due and fair consideration prior to a fInal decision. Developer agrees to cooperate
with such replatting and to sign any new plat if necessary. Developer also agrees to
reimburse the HRA at the Closing for one-half of the HRA's reasonable out-of-pocket costs
for surveying and replatting of the Development Propert'j.
.
Section 3.3. Condemnation of the Develooment Prooerty. Within 30 days after the
Commitment Date, the HRA shall commence acquisition of all of the Development Property
by negotiated purchase or condemnation. The HRA shall use reasonable effortS to complete
the acquisition of all of the Development Property without unreasonable delay or expense.
Approximately 90 days after commencing any condemnation proceeding, the HRA shall
notify Developer whether it intends to acquire the subject property iIr.J:nediately pursuant to
quick-take condemnation, or proceed with a normal condemnation that will delay its
acquisition of the subject property until completion of the proceeding. Such determination
shall apply to all of the Development Property which the HRA has been unable to purchase.
If the HRA determines to acquire the Development Property by normal condemnation,
Developer may request the HRA, in writing, to convert all. but not less than all, of the
proceedings to quick-take condemnation. The HRA shall grant such request, provided
Developer increases the amount of the escrow described in Section 4.5 by the additional
amount provided therein. The HRA also agrees to relocate all existing tenants and residents
of any property which is the subject of a condemnation proceeding, in accordance with
Minnesota law.
The HRA also agrees to demolish the buildings and other improvements on the
Development Property prior to the Closing Date in accordance with the specifIcations
attached as Exhibit F.
Section 3.4. Environmental Matters. To the extent required by applicable law or
regulation, and at its sole cost and expense, the HRA agrees to remediate any Hazardous
Substances known to be on, in, or under the Development Property on or before the Closing
Date. In connection therewith, the HRA shall comply with all plans, orders, regulations or
requirements issued by the MPCA, or any other regulatory agency with jurisdiction in the
matter, concerning the presence of Hazardous Substances known to be on, in, or under the
Development Property on or before the Closing Date. Except as provided hereby, Developer
agrees that subsequent to the Closing Date it shall comply, at its sole cost and expense, with
all plans, orders, regulations or requirements concerning the Development Property issued by
the MPCA, or any other regulatory agency with jurisdiction in the matter, except to the
extent caused by the HRA' s failure to comply with its obligations under this paragraph.
.
Subject to the foregoing paragraph, the HRA makes no representation or warranty,
express or implied, concerning the presence on, in or under the Development Property of
any Hazardous Substances, and the HRA disclaims any and all liability and responsibility to
Developer in connection therewith. Such disclaimer shall not be construed to release or
relieve the HRA from liability or responsibility to any parties, private or public, other than
Developer, in connection therewith.
Section 3.5. Real Estate Taxes and Soecial Assessments. The HRA shall pay all
property taxes which become due and payable on the Development Propeny prior to thp
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Closing Date. The HRA shall pay in full all special assessments against the Development
Propeny which are levied or pending (approved by the City Council) as of the Closing Date.
Developer shall pay all other real estate taxes and special assessments. The HRA also agrees
that Developer shall not be assessed for the cost of constructing the new road or associated
utilities between Lot 1 and Lot 2 of the Development Propeny.
.
Section 3.6. Deed. Upon tender to the HRA on the Closing Date of the Purchase
Price for the Development Propeny from Developer, the HRA shall deliver to Developer a
separate limited warranty deed for each of Lot 1 and Lot 2 in the form attached as Exhibit G
(the "Deed or DeedS"). Each Deed shall be'subject to the restrictions, reservations and
encumbrances of record, if any (except those to which Developer has objected), all building
and zoning laws and ordinances and all other local, state, and federal laws and regulations,
the terms and conditions of this Agreement, and such other encumbrances as the HRA and
Developer shall mutually agree. Each Deed shall contain a forfeiture clause providing for
revesting of title of the Development Propeny in the HRA, subject to the rights of the
Holder of a FiI:st Mortgage, upon the occurrence of an Event of Default (as defmed in
Section 10.1 hereof) and expiration of any period to cure such Event of Default provided in
Section 10.2 hereof prior to issuance of the Certificate of Completion for such Lot. The
Purchase Price shall be due and payable in full at closing in cash. or by cashier's or certified
check. Delivery of the Deeds shall not cause termination of any provisions of this
Agreement or the Assessment Agreement. except where expressly provided in such
agreements. Except as provided in Section 3.1 and Section 3.2, all costs of the conveyance
of the Development Propeny to Developer, including any and all fees and charges relating to
such conveyance, and filing or recording fees and any and all other taxes and charges
payable in connection with such conveyance, if any. shall be wholly borne by Developer,
except for the State deed tax which shall be paid by the HRA on the Closing Date. and
except that the HRA shall pay its own attorneys' fees. The HRA shall voluntarily take no
actions to encumber title. or fail to take any action necessary to prevent encumbrance of title,
between the date hereof and date of delivery of the Deeds to Developer by the HRA pursuant
to this Section.
The Parties shall also execute on the Closing Date the Easement Agreement attached
as Exhibit H which shall grant Developer the nonexclusive right to connect to and use the
stormwater retention pond located on Lot I, Block 2. Golden Hills West 3rd Addition fQr
drainage of stormwater from the Development Propeny.
Section 3.7. Recording. Developer shall cause the title insurance company to
promptly fIle the Agreement, the Deeds, and the Assessment Agreements in the office of the
Hennepin County Recorder. Developer shall pay all costs of recording, except for the State
deed tax which shall be paid by the HRA on the Closing Date.
.
Section 3.8. Use. From the Closing Date through December 31, 2010, Developer
shall, operate and maintain the Improvements upon the Development Propeny in accordance
with the terms of this Agreement, the Plan and all local, state and federal laws and
regulations, and Developer shall devote the Improved Parcels only to use as an
office/warehouse facility and office/warehouse facility or office building. respectively, as
specified in this Agreement. and there shall be no unlawful discrimination in the use of the
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Development Propeny on account of race, color, religion, sex, age, national origin, or
political affiliation. If the Plan is subsequently amended in a material respect. such
amendment shall not bind Developer or the Development Propeny without Developer's
consent, which consent shall not be unreasonably withheld or delayed. To the extent that
there are any conflicts between this Agreement and the Plan, the provisions of this
Agreement shall govern, and the approval by the HRA of this Agreement shall constitute an
amendment of the Plan.
Section 3.9. Condemnation. In the event that title to and possession of the builuing
Improvements or arty material part thereof sliall be taken in condemnation or by the exercise
of the power of eminent domain by any governmental body or other person (except the HRA)
after the Closing Date but prior to December 31, 2010, Developer shall, with reasonable
prompmess after such taking, notify the HRA as to the nature and extent of such taking.
Upon receipt of any condemnation award, subject to the rights of the Holder of a First
Mortgage, Developer shall use the entire condemnation award first to pay the reasonable
costs and expenses of such taking, including but not limited to reasonable attorneys' fees and
appraisers' fees, and second to reconstruct the building Improvements to the extent
practicable (or, in the event only a part of the building Improvements have been taken, then
to reconstruct such part) upon the Development Propeny.
Section 3.10. Guaranty.
If this Agreement has not been terminated by either Party on or before the Commitment
Date, then on that date Developer shall deliver to the HRA an executed copy of the Guaranty
attached as Exhibit I, or Developer shall deposit an additional $5,000,000 into the escrow
account described in Section 4.5.
ARTICLE IV
Construction of Imorovements
Section 4.1. Construction of Improvements. Developer agrees that it will construct
the Improvements on the Development Propeny in substantial conformance with the
approved Development Plans for the Improvements and in confonnance with all applicable
legal requirements. Developer agrees that the scope and scale of the Improvements to be
constructed shall not be significantly less than the scope and scale of the Improvements as
detailed and outlined in the Development Plans.
Section 4.2. Commencement and Comoletion of Construction. Developer shall
commence construction of the Improvements on Lot 1 and Lot 2 promptly after the Closing
Date, and shall diligently prosecute construction to completion, provided that if the Closing
Date occurs after October 15, 1997, Developer may delay commencement of construction of
the Improvements until on or before May 1, 1998.
As an alternative to the commencement date specified in the above paragraph for Lot
2, Developer may elect, by written notice delivered to the HRA on or before the Closing
Date, to defer commencement of construction of the Improvements on Lot 2 for up to 12
months after the Closing Date. After commencement, Developer shall diligently prosecute
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construction to completion. Developer may further delay commencement of construction of
any Improvements on Lot 2 for up to 12 months after the date commencement would be
required under this paragraph, and for two additional extensions of 12 months each
thereafter, if Developer delivers to the HRA, at least 90 days prior to the date construction
would otherwise be required to be commenced hereunder, a copy of the most recent Towle
Report (or reasonable replacement if the Towle Report is no longer published) which states
that both the office/warehouse market and the office l:tuilding market, in the relevant
geographic submarket, then have a vacancy rate of 12 percent or more. The information in
the report cannot be more than 12 months old. In no event may Developer delay
commencement of construction of ImprovemeIlts on Lot 2 under this paragraph for more than
four years from the Closing Date.
Developer shall give the HRA written notice immediately upon Developer's
determination of whether it has elected to construct an office/warehouse facility or office
building on Lot 2. Such notice shall be given to the HRA at least 60 days prior to
Developer's commencement of construction of the Improvements on Lot 2.
If the Closing Date occurs on or before May 1. 1998, Developer shall complete
construction of 100 percent of the Improvements, as a percentage of market value, on Lot 1
by January 2, 1999. Developer shall complete construction of 100 percent of the
Improvements, as a percentage of market value, on Lot 2 within 12 months after the
commencement of construction.
If the Closing has not occurred by May 1, 1998, for reasons other than a breach or
default by either Party, then the Parties shall negotiate reasonably and in good faith for an
extension of the completion dates in this Section and in Section 5.1, provided neither Party
has elected to terminate this Agreement. The times provided herein for commencement and
completion of construction shall also be extended to the extent of any Unavoidable Delays.
All work with respect to the Improvements to be constructed or provided by Developer on
the Development Property shall be in substantial conformity with the Development Plans as
submitted by Developer and approved by the HRA, and in compliance with all applicable
laws and regulations.
Upon issuance of the Certificate of Completion, the HRA shall reimburse Developer
for out-of-pocket costs and expenses actually incurred by Developer after the Closing Date
for soil correction on the Development Property reasonably required to permit construction
of the Improvements, and approved in advance by the HRA. All such expenses shall be
documented by invoices or other billing statements and are limited to the maximum amount
determined pursuant to Section 2.3(t).
On the Closing Date, Developer shall deliver to the owner of the adjacent Holiday Inn
Express hotel property the Access and Signage Easement attached as Exhibit J.
Subsequent to execution of this Agreement, and until certification of the
Improvements pursuant to Section 4.3, Developer shall make reports to the HRA. in such
detail and at such times as may reasonably be requested by the HRA, as to the actual
progress of Developer with respect to construction of the Improvements. Developer also
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agrees that designated representatives of the HRA may enter upon the Development Propeny
during the construction of the Improvements to inspect such construction.
The Holder of a First Mongage shall not have any obligation to construct or complete
construction of the Improvements while in possession of the Development Propeny pursuant
to foreclosure, or conveyance by Developer to the Holder of the First Mongage in lieu of
foreclosure, except as provided in Section 8.3.
Section 4.3. Cenificate of Comoletion.
(a) Promptly after completion of the Improvements in accordance with the
provisions of this Agreement for either Lot, the HRA will furnish Developer with a
Cenificate of Completion for such Lot, in substantially the form set fonh in Exhibit C
attached hereto. Such Cenificate of Completion shall be ,and it shall be so provided
in the Cenificate of Completion itself) a conclusive determination of satisfaction and
termination of the agreements and covenants in this Agreement with respect to the
obligations of Developer to construct the Improvements on such Lot.
.
(b) If the HRA shall refuse or fail to provide a Cenificate of Completion in
accordance with the provisions of this Section. the HRA shall. within ten (10) days
after written request by Developer, provide Developer with a written statement.
indicating in adequate detail in what respects Developer has failed to complete the
Improvements in accordance with the provisions of this Agreement, or is otherwise in
default under the terms of this Agreement, and what measures or acts will be
necessary, in the opinion of the HRA, for Developer to take or perform in order to
obtain such. Certificate of Completion.
.
Section 4.4. Deoosit and Reimbursement of HRA Exoenses. Pursuant to a prior
Reimbursement Agreement between the Panies which is hereby terminated. Developer has
deposited $20,000 with the HRA for the reimbursement of certain out-of-pocket expenses
incurred by the HRA in connection with the Project (the "Deposit"). The HRA shall treat
the Deposit as a separate account on its books, but the HRA may commingle the Deposit
with its other funds for purposes of investment and reinvestment. All interest earned on the
Deposit shall accrue to the HRA. The Deposit shall be applied by the HRA for the payment
of out-of-pocket expenses relating to this Agreement and paid or incurred by the HRA for
appraisal, environmental, geotechnical, surveying, title, legal, demolition or relocation
services between May 28, 1996 and the earlier of (a) the Closing Date, or (b) the date of
termination of this Agreement. The Panies agree to share equally such expenses. MEPC's
share of the expenses will be paid from the Deposit, and the HRA' s share of the expenses
will be paid from its separate funds. Each time that the Deposit is reduced to $10,000, and
the HRA has spent from its own funds an amount equal to the amount spent from the
Deposit, the HRA shall give Developer written notice. and Developer shall immediately
contribute an additional $25,000 to the Deposit, subject to a maximum contribution by
Developer to the Deposit pursuant to this Agreement and the Reimbursement Agreement of
$300,000. The HRA shall provide Developer with a reasonably detailed itemization for any
amounts spent from the Deposit. Developer shall be given a credit against the Purchase
Price for any amount contributed by it to the Deposit. In the event this Agreement is
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terminated prior to the Closing Date for any reason other than a default by Developer, the
HRA shall return to Developer any amount remaining in the Deposit in excess of
Developer's share of accrued expenses payable hereunder. If this Agreement terminates
prior to the Closing Date as the result of a default by Developer, Developer shall forfeit its
right to the return of any funds from the Deposit. The HRA's rights under this Section 4.4
shall not limit any other remedy to which it is entitled under this Agreement or at law or
equity due to an Event of Default by Developer, except to the extent that the HRA's damages
are reduced by any amounts received under this Section 4.4.
.
Section 4.5.. Escrow Allreement. If this Agreement has not been terminated by
either Party on or before the Commitment Date, then on that date the Parties shall execute
the escrow agreement with First Bank St. Paul (the "Bank") attached as Exhibit J, and
Developer shall immediately transfer to the Bank pursuant thereto the sum of $2,000,000,
which shall secure Developer's obligations under this Agreement. If Developer requests the
HRA to conven the proposed or pending condemnation action to a quick-take condemnation
pursuant to Section 3.3, and if the HRA grants such request, Developer shall thereupon
increase the amount of the escrow to an amount reasonably determined by the HRA
necessary to protect the HRA against the increased risk of a quick -take condemnation, but
not in excess of $5,000,000. The amount of the escrow shall not be increased if the HRA
determines independently to utilize quick-take condemnation. The Escrow Agreement shall
provide that the amount of the escrow may be reduced to $1,500.000 upon completion of
the Closing. The amount in the escrow account after the Closing may be reduced by a
percentage equal to the percentage by which the Improvements have been completed (based
upon a total value of $6,199,500, or $6,322,500 if the office building is constructed on Lot
2) upon Developer's delivery to the HRA of a cenified statement by the contractor stating
the percentage completed together with executed lien waivers or other receipts of payment.
In addition to the amount required to be deposited by Developer into the escrow
account pursuant to the prior paragraph, if Developer does not deliver to the HRA on the
Commitment Date an executed copy of the Guaranty pursuant to Section 3.10, then on that
date Developer shall transfer to the Bank an additional $5,000,000 for deposit in the escrow
account, to secure Developer's obligations under this Agreement. The additional amount
may not be reduced upon completion of the Closing, or after the Closing based on panial
completion of the Improvements.
The Escrow Agreement shall provide that the HRA has no rights thereunder if this
Agreement is terminated by the HRA or Developer pursuant to its rights to do so prior to an
Event of Default by Developer. The Escrow Agreement shall also provide for payment to
Developer of the entire amount in the escrow account upon issuance by the HP ,1\ of the
Certificate of Completion.
.
The HRA' s rights with respect to the Escrow. Agreement shall not limit any other
remedy to which it is entitled under this Agreement or at law or equity due to an Event of
Default by Developer, except to the extent that the. HRA' s damages are reduced by its
recovery under the Escrow Agreement.
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If the amount in the escrow account is paid to the BRA upon an Event of Default by
Developer, the HRA agrees to pay to Developer any amount by which the amount paid to the
BRA exceeds the HRA' s total unreimbursed and unrecovered costs, expenses, fees, taxes,
charges, and damages related in any way to the Development Property or the Project, as
determined by the HRA in its reasonable discretion.
ARTICLE V
Assessment Aereement and PaYment of Taxes
Section 5.1. Execution of Assessment Aereement. Developer agrees, upon the
Closing Date, to execute and deliver to the BRA a separate Assessment Agreement for each
Lot pursuant to the provisions of Minnesota Statutes, Section 469.177, Subdivision 8,
specifying the Assessor's Minimum Market Value which shall be assessed upon the Improved
Parcel for each Lot for calculation of real estate taxes pursuant to Minnesota Statutes,
Section 272.01, or any successor statute. The Assessment Agreement shall be in the form of
Exhibit C. Specifically, Developer shall agree that the land and all improvements thereto
comprising the Improved Parcel with respect to which any real estate taxes, or taxes in lieu
thereof which are levied or assessed and payable by Developer, shall be assessed to be of a
market value of not less than the following:
(a) For Lot 1, $2,747,500 on January 2, 1999;
(b) (i) For Lot 2. $1,726,000 for the office warehouse facility or $1,787,500
for the office building on January 2, 1999, and $3,452,000 for the office
warehouse facility or $3.575,000 for the office building on January 2, 2000, if
Developer does not elect to defer commencement of construction of the
Improvements on Lot 2 pursuant to Section 4.2; or
(b)(ii) For Lot 2, $3,452,000 for the office warehouse facility or $3,575,000
for the office building on January 2, 2000, if Developer elects to defer
commencement of construction of the Improvements on Lot 2 pursuant to
Section 4.2;
increased for all years by the amount of $35.00 for each square foot of office/warehouse
Improvements on Lot 1 in excess of 78,500 square feet, and by (a) $40.00 for each square
foot of office/warehouse Improvements on Lot 2 in excess of 86,300 square feet, or (b)
$55.00 for each square foot of office building Improvements on Lot 2 in excess of 65,000
square feet, and decreased for all years by the fair market value of any ponion of the
building Improvements taken in condemnation or by the power of eminent domain for which
reconstruction is impracticable as provided in Section 3.9, and by Developer's cost for any
portion of the unimproved Improved Parcel taken in condemnation or by the power of
eminent domain.
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If Closing occurs after May 1, 1998, for reasons other than a breach or default by
either Party, then the Panies shall negotiate reasonably and in good faith for an extension of
the above dates, provided neither Party has elected to terminate this Agreement.
Section 5.2. Pavment of Taxes. Assessments. Etc.
Following the Closing Date, Developer agrees to payor cause to be paid, on or prior
to their due dates, all real estate taxes, assessments, water, sewer and other charges, which
become due and payable on or before December 31, 2010 with respect to the Development
Property or any pari: thereof. Developer agrees that this obligation creates a contractual right
on behalf of the HRA which shall allow the HRA to sue Developer to collect delinquent real
estate taxes and any penalty or interest thereon and to pay over the same to the County.
Developer may, at its expense, in its own name and in good faith, contest any such
taxes, assessments and other charges; provided, however, that the rights of Developer to seek
administrative or judicial review of the application of. or any determination made pursuant
to, any tax statute relating to the taxation of real property contained on the Development
Property shall be strictly subject to the restrictions contained in the Assessment Agreement.
.
Section 5.3. Minimum Tax Increment. If the tax increment actually paid to the
HRA with respect to both of the Improved Parcels in any of the years set forth below is less
than the tax increment amount specified below for such year or years, Developer shall pay to
the HRA all of such shortfall in cash, within 30 days of Developer's receipt of written notice
from the HRA specifying the amount of the shortfall and the amount required to be paid by
Developer under this Section.
Year
Tax Increment
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
$ 217,035
217,035
217,035
217,035
217,035
217,035
217,035
217,035
217,035
217,035
.
Developer's obligation under the foregoing provision shall be absolute and unconditional,
irrespective of any defense or any rights of set-off, recoupment, or counterclaim which
Developer might otherwise have against the HRA or any other legal person. Developer's
obligation under the foregoing provision shall terminate at December 31, 2010.
If Closing occurs after May 1, 1998, for reasons other than a breach or default by
either Party, then the Panies shall negotiate reasonably and in good faith for an extension of
the above dates, provided neither Party has elected to terminate this Agreement.
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Section 5.4. Return of Purchase Price. If Developer does not elect to defer
commencement of consnuction of the Improvements on Lot 2 pursuant to Section 4.2, and if
as of the date which is twelve months after the date of the Certificate of Completion issued
by the HRA for Lot 2, Developer certifies to the HRA that the Improvements on Lot 2 are
not SO% or more leased, the HRA shall pay to Developer, within 30 days of the HRA's
receipt of Developer's certified statement, as a return of the Purchase Price, the sum of
$1,000 for each full percent by which the percentage of leased Improvements is less than
SO %, subject to a maximum of $75,000. If as of the date which is 24 months after the date
of the Certificate of Completion issued by the HRA for Lot 2, Developer certifies to the
HRA that the improvements on Lot 2 are not'SO% or more leased, the HRA shall pay to
Developer, within 30 days of the HRA' s receipt of Developer's certified statement, as a
return of the Purchase Price, the sum of $1,000 for each full percent by which the
percentage of leased Improvements is less than SO%, subject to a maximum of $25,000. No
payment shall be due at either time if an Event of Default by Developer has occurred and is
then continuing.
ARTICLE VI
.
Insurance
Section 6.1. Insurance.
(a) Developer shall provide and maintain, or cause to be maintained, at all
times during the process of consnucting the Improvements, at its sole cost and
expense, and, from time to time at the request of the HRA, furnish the HRA with
proof of payment of premiums on:
(i) Builder's risk insurance, written on the so-called "Builder's Risk
Completed Value Basis", in an amount equal to one hundred percent (100%)
of the insurable value or one hundred percent (100%) of the full replacement
cost of the Improvements at the date of completion, with a deductible amount
of not more than $25,000, and with coverage available in nonreporting form
on the so-called "all risk" form of policy;
(ii) Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and
contractual liability insurance) together with an Owner's and Contractor's
Protective Policy with limits against bodily injury and property damage of not
less than $5,000,000 for each occurrence (to accomplish the above-required
limits, an umbrella excess liability policy may be used). The interest of the
HRA shall be protected in accordance with a clause in form and content
satisfactory to the HRA; and
.
(iii)
Worker's compensation insurance, with statutory coverage.
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The policies of insurance required pursuant to clauses (i) and (ii) above shall
be in fonn and substance reasonably satisfactory to the HRA and shall be placed with
fmancially sound and reputable insurers licensed to transact business in the State. The
policy of insurance required pursuant to clause (i) above shall contain an agreement of
the insurer to give not less than thirty (30) days' advance written notice to the HRA
and Developer in the event of cancellation of such policy or change affecting the
coverage thereunder.
(b) . Upon completion of construction of the Improvements and prior to
December 31, 2010, Developer shall'maintain, or cause to be maintained, at its sole
cost and expense, and from time to time at the request of the HRA shall furnish proof
of the payment of premiums on insurance as follows:
.
(i) Insurance against loss and/or damage to the Improvements under
a policy or policies covering such risks as are ordinarily insured against by
similar businesses, including (without limiting the generality of the foregoing)
fIre, extended coverage, vandalism and malicious mischief, explosion, water
damage, demolition cost, debris removal, and collapse in an amount not less
than 90 percent of the full replacement cost of the Improvements, but any such
policy may have a deductible amount of not more than $25,000. No policy of
insurance shall be written so that the proceeds thereof will produce less than
the minimum coverage required by the preceding sentence, by reason of
co-insurance provisions or otherwise, without the prior consent thereto in
writing by the HRA. The term "full insurable replacement value" shall mean
the actual replacement cost of the Improvements (excluding foundation and
excavation costs and other uninsurable items) and equipment.
(ii) Comprehensive general public liability insurance, including
personal injury liability for injuries to persons and/or property, including any
injuries resulting from the operation of automobiles or other motorized
vehicles on or about the Development Property, in the minimum amount for
each occurrence of $5,000,000.
(Hi) Worker's compensation insurance respecting all employees of
Developer in amounts not less than the minimum required by statute.
.
(c) All insurance required in this Article VI shall be taken out and
maintained in responsible insurance companies selected by Developer which are
authorized under the laws of the State to assume the risks covered thereby. At the
flISt time that any insurance is required to be in effect hereunder, Developer will
deposit with the HRA a certifIcate or certifIcates or binders of the respective insurers
evidencing that such insurance is in force and effect. Unless otherwise provided in
this Article VI, each policy shall contain a provision that the insurer shall not cancel
or modify it without giving written notice to Developer and the HRA at least thirty
(30) days before the cancellation or modification becomes effective. Upon the HRA's
request, Developer shall furnish the HRA evidence satisfactory to the HRA that any
policy required hereunder is in effect. In lieu of separate policies. Developer may
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maintain a single policy, or blanket or umbrella policies. or a combination thereof,
which provide the total coverage required herein. in which event Developer shall
deposit with the BRA a cenificate or cenificates of the respective insurers as to the
amount of coverage in force upon the Improvements.
.
(d) In the event the Improvements or any ponion thereof is destroyed by
fire or other casualty, then Developer shall within sixty (60) days after such damage
or destruction, commence to repair, reccnstruct and restore the damaged
Improvements to substantially the same or improved condition or utility value as they
existed priono the event causing such damage or destruction and, to the extent
necessary to accomplish such repair, reconstruction and restoration. Developer shall.
subject to the rights of the Holder of a First Mongage, apply the Net Proceeds of any
insurance relating to such damage or destruction to the payment or reimbursement of
the costs thereof. Developer shall complete the repair and reconstruction of the
Improvements, whether or not the Net Proceeds of insurance received by Developer
for such purposes are sufficient to pay for the same. Any Net Proceeds remaining
after completion of construction shall be disbursed to Developer. subject to the rights
of the Holder of the First Mongage. The BRA agrees to subordinate its rights under
this paragraph to the Holder of a First Mongage. but only to the extent of amounts
owing to the Holder under the First Mongage.
ARTICLE VII
Undertakinl!s of the HRA
Section 7.1. Sale of Develooment Prooeny. As consideration for the purchase of the
Development Propeny and construction of the Improvements by Developer. the HRA agrees
to complete, subject to the provisions of Section 7.2 below, the following actions:
(a) Acquisition of the Development Propeny and sale to Developer
pursuant to the Deeds on the Closing Date.
(b) Use reasonable efforts with the City so that the Improvements may
constitute a permitted use under the zoning ordinance of the City.
(c) Use reasonable efforts with the City to complete construction of the
road dividing the Development Propeny within 270 days after the Closing Date.
(d) Provide Developer with reasonable public access to each Lot at all times
following commencement of construction of the Improvements on such Lot.
.
(e) Any other actions required pursuant to an express provision of this
Agreement, including remediation of Hazardous Substances pursuant to Section 3.4
and demolition pursuant to Section 4.1.
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Section 7.2. Limitations on Financial Undenakimzs of the HRA. The provisions of
Section 7.1 of this Agreement notwithstanding, the HRA shall have no obligation to
Developer under this Agreement to take any action provided for in this Agreement except
upon existence of the following conditions:
(a) Developer has satisfied all conditions precedent under this Agreement:
(b) No Event of Default has occurred and is then continuing beyond the
cure period provided in Section 10.2;
(c) The HRA and Developer have received all necessary approvals from the
City, the County Assessor and other authorities to implement this Agreement;
(d) The HRA is not the subject of any court or administrative proceeding
seeking to enjoin or otherwise prevent the HRA from taking any action under this
Agreement: and
.
(e) The HRA does not determine, reasonably and in good faith. that it is
unable to acquire. remediate and demolish all of the Development Property for a total
cost, including all related fees and expenses. of $10.000.000 or less: provided that
Developer may pay any excess on behalf of the HRA and remove this condition, but
without creating any obligation of the HRA to Developer or any other person, and
without causing any reduction in the Purchase Price.
The HRA shall give Developer prompt notice at such time as it determines that the
condition described in (e) will not be satisfied. If the HRA has not given Developer notice,
on or before the Closing Date, that the condition described in (e) has not been satisfied and
that this Agreement shall be terminated. the condition shall lapse.
The Parties agree that the failure of the Closing to occur due to any of the above
reasons shall not constitute an event of default by the HRA.
Section 7.3. HRA to Maintain Existence. The HRA covenants and agrees that it
shall at all times do or cause to be done all things within its statutory powers necessary to
presetVe and keep in full force and effect its existence, or to assure the assumption of its
obligations under this Agreement and the Development Agreement by any public body
succeeding to its powers.
.
Section 7.4. HRA's Option to Terminate. This Agreement may be terminated by the
HRA by written notice to Developer if the HRA is in compliance with all material terms of
this Agreement and Closing has not occurred by May 1. 1998; provided, however, that
termination of this Agreement pursuant to this Section 7.4 shall not affect the rights of the
HRA to institute any action, claim or demand for damages suffered as a result of breach or
default of the terms of this Agreement by Developer.
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ARTICLE VIII
Mortl!al!e Financin~
Section 8.1. Aoproval of Mnrtl!al!e. Any First Mortgage prior to issuance of the
Certificate of Completion for a Lot shall require the prior written approval of the HRA' s
Director. Developer may rely upon any approval granted hereunder by the HRA's Director
without additional action by the HRA. Approval shall not be unreasonably withheld or
delayed, and shall be given if:
and
(a) the HRA's Director first receives a copy of all mortgage documents;
(b) the HRA's Director determines that the terms of the First Mortgage
conform and are subject to the terms of this Agreement, except to the extent the HRA
agrees to subordinate its interest to the terms of the First Mortgage.
.
The Holder of the First Mortgage (or any nominee or agent controlled by the Holder)
shall not be obligated to undertake or continue construction or completion of the
Improvements while in possession of the Development Property pursuant to the foreclosure.
or conveyance by Developer to the Holder in lieu of foreclosure. except upon express
assumption of such obligation as provided in Section 8.3, provided that nothing in this
Section or in any other section of this Agreement shall be deemed or construed to permit any
Holder to devote the Development Property or any portion thereof to any use. or to construct
any improvement. other than those uses or improvements permitted by this Agreement.
Further. any party who obtains any interest in all or any portion of the Development
Property from or through any Holder, except for any nominee or agent controlled by the
Holder. whether through foreclosure sale or otherwise. shall be strictly subject to the terms
and conditions of this Agreement. as such are binding on Developer, and such party shall not
be entitled to any additional rights or privileges granted a Holder hereunder.
Section 8.2. Notice of Default: Coov to Mortl!a~ee. Whenever the HRA shall
deliver any notice or demand to Developer with respect to any breach or default by
Developer in its obligations or covenants under this Agreement. the HRA shall at the same
time forward a copy of such notice or demand to each known Holder of any First Mortgage
at the last address of such Holder shown in the records of the HRA.
.
Section 8.3. Mortttal!ee's Dotion to Cure Defaults. After any breach or default
referred to in Section 8.2 hereof. each such Holder shall (insofar as the rights of the HRA
are concerned and subject to any rights of the Mortgagor under such Mortgage) have the
right. at its option. for a period of 90 days after notice of such default pursuant to
Section 8.2 hereof. to cure or remedy such breach or default and to add the cost thereof to
the Mortgage debt and the lien of its Mortgage. If a default is not susceptible of cure within
such 90-day period. the Holder shall have such period of time as is necessary to cure such
default provided the Holder promptly commences the cure and thereafter proceeds to cure
such default as soon as reasonably possible and provided such failure to cure within 90 days
does not jeopardize the purposes of the Agreement or the Plan. However. if the breach or
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default is with respect to construction of the Improvements, nothing contained in this Section
or any other Section of this Agreement shall be deemed to permit or authorize such Holder,
either before or after foreclosure or action in lieu thereof, to undertake or continue the
construction or completion of the Improvements (beyond the extent necessary to conserve or
protect Improvements or construction already made) for more than 90 days after the Holder
has received notice of such default pursuant to Section 8.2 hereof, without fIrst having
expressly assumed the obligation to the HRA, by written agreement reasonably satisfactory to
the HRA, to complete, in the manner provided in this Agreement and in conformance with
the Development Plans, the Improvements on the Development Property. If the Holder
enters into an agreement assuming the obligations of Developer under the Agreement, such
agreement shall provide that all obligations of the Holder thereunder shall terminate at such
time as the Agreement is assigned by the Holder in accordance with the provisions of Section
9.1 of the Agreement or in accordance with the following paragraph. Any Holder who shall
properly complete the Improvements relating to the Development Property shall be entitled,
upon written request made to the HRA, to a cenifIcation by the HRA to such effect in the
manner provided in Section 4.3 of this Agreement.
.
In addition to the assignments permitted pursuant to Section 9.1 of the Agreement, if
the Holder of a First Mongage acquires the interest of Developer under the terms of the
Agreement, the Holder shall be permitted to assign its interest in the Agreement with the
consent of HRA, which consent shall not be unreasonably withheld or delayed. In exercising
its judgment as to whether or not to grant such consent, the HRA shall take into account only
the fmancial condition and experience of the proposed assignee and its capacity to perform
the obligations remaining to be performed under the Agreement at the time of such
assignment; provided that, after the CertifIcate of Completion has been issued, the experience
of the proposed assignee shall no longer be a factor.considered by the HRA as to whether or
not grant such consent. In addition, the Holder may assign its interest at any time without
the consent of the HRA to a person with a verifIable net wonh in excess of $5.000,000.
Any such assignee shall agree in writing with the HRA, for itself and its successors and
assigns, to be bound by the terms and conditions of the Agreement, the Deed, the
Assessment Agreement, the Easement Agreement and the Plan, and not to transfer, mongage
or otherwise convey any ponion of the Development Property except as permitted in the
Agreement.
Section 8.4. HRA's ODtion to Cure Default on Mon~age. Any Mongage executed
by Developer with respect to the Development Property, or any improvements thereon. shall
provide that, in the event that Developer is in default under any Mongage authorized
pursuant to this Anicle vm, the mongagee, within ten (10) days after it has declared or
given notice to Developer of a default, shall notify the HRA in writing of:
(a) the fact of the default;
.
(b) the elements of the default; and
(c) the actions required to cure the default.
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The HRA shall. have the right to cure any such default which occurs prior to issuance
of the Cenificate of Completion. The HRA shall have a period of 35 days after notice from
a Holder to effect a cure, provided that the HRA gives Developer advance written notice of
its intent to cure. In the event of such cure prior to the issuance of the Certificate of
Completion, the HRA shall thereupon be entitled, in addition to and without limitation upon
any other rights or remedies to which it may be entitled, to reimbursement from Developer
or any successor or assignee of any costs and expenses incurred by the HRA in curing such
default. Interest shall accrue on any amounts due the HRA under this paragraph at the
reference rate of interest then in effect at First Bank Minneapolis until such amounts are
paid, and such amOUnts shall result in the creation of a lien on the Development Property in
favor of the HRA, subordinate to the lien of any First Mongage.
.
Section 8.5. Subordinate Liens. Until the Cenificate of Completion has been issued,
Developer agrees that it will not create, incur. assume or suffer any security interest,
mongage, pledge, lien. charge, or encumbrance upon the Development Property except for a
First Mongage permitted under this Article. Developer may, at its own expense, in its own
name and in good faith, contest any involuntary lien. charge or encumbrance and not be in
default hereunder provided Developer first posts a bond or provides other security to the
HRA or to the Holder. or to an agent of the Holder. including, without limitation, a title
insurance company, which the HRA reasonably determines is adequate to protect the interest
of the HRA.
ARTICLE IX
Restrictions on Transfer: Indemnification
Section 9.1. Restrictions on Transfer. Until the Cenificate of Completion for a Lot
has been issued by the HRA. this Agreement and Developer's interest in the Lot (or any pan
thereof) may not be sold, transferred or assigned by Developer without the prior written
consent of the HRA, which consent may be granted or withheld by the HRA in its sole
discretion.
.
After the Certificate of Completion for a Lot has been issued by the HRA, but prior
to December 31, 2010, this Agreement and Developer's interest in the Lot (or any pan
thereof) may be sold, transferred or assigned by Developer, provided that the purchaser, as
of the date of such transfer, is reasonably determined by the HRA to be of sufficient
fmancial condition, experience, and reputation to perform fully under this Agreement and the
Assessment Agreement, and the purchaser first agrees in writing with the HRA, for himself,
his heirs, representatives, successors and assigns, to be bound by the terms and conditions of
this Agreement, the Deed. the Assessment Agreement, and the Plan, and not to sell,
transfer, mongage or otherwise assign any ponion of the Development Property except as
permitted herein. After the Cenificate of Completion for a Lot has been issued by the HRA,
but prior to December 31, 2010. this Agreement and Developer's interest in the Lot (or any
pan thereof) also may be assigned without the consent of the HRA to a person with a
verifiable net wonh in excess of $5,000.000. In either event. Developer shall be released
from any obligation or liability hereunder to the extent of the interest purchased. After the
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Certificate of Completion for a Lot has been issued by the HRA, but prior to December 31.
2010, this Agreement and Developer's interest in the Lot (or any part thereof) may be sold.
transferred or conveyed by Developer free of the foregoing conditions. but, in such event.
Developer shall remain primarily liable for performance of the terms and conditions of this
Agreement and the Assessment Agreement for the remainder of their respective terms.
The Parties agree that the terms and conditions hereof run with the land and shall be
binding upon their successors and assigns. The Parties also agree that nothing contained in
this Section 9.1 shall prohibit the leasing of the Improvements to CyberOptics Corporation or
other lessees, and nothing contained in this Section 9.1 shall prohibit the sale, transfer or
assignment by Developer of the Development Property (or any part thereof) to a general
partnership, limited partnership or limited liability partnership in which Developer has at
least a 50 percent interest as a general partner.
.
Section 9.2. Indemnification. Developer hereby agrees to indemnify, defend and
hold harmless the HRA. and its officials, employees and agents, against any and all claims.
demands, lawsuits. judgments, damages. penalties, costs and expenses. including reasonable
anorneys' fees, arising out of any wrongful actions or omissions by Developer, its employees
and agents. in connection with the Project. except to the extent of any bad faith or intentional
misconduct by the HRA. or other person seeking indemnification. This provision shall
continue indefinitely after the termination of this Agreement.
ARTICLE X
Events of Default
Section 10.1. Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean. whenever it is used in this
Agreement. anyone or more of the following events:
(a) Failure by Developer to pay the Purchase Price or otherwise perform on
the Closing Date.
(b) After the Closing Date and until December 31, 2010, failure by
Developer to timely pay all real property taxes, assessments or other charges assessed
with respect to the Development Property.
(c) Subject to Unavoidable Delays, and extensions agreed to by the Parties,
failure by Developer to commence and complete construction of the Improvements
pursuant to the terms, conditions and limitations of Anicle IV of this Agreement.
.
(d) Until December 31, 2010, failure by Developer to observe or perform
any material covenant. condition, obligation or agreement on its part to be observed or
performed under this Agreement.
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(e) Until both Certificates of Completion have been issued, fIling by
Developer in any court, pursuant to any federal or State statute, of a petition in
bankruptcy or insolvency, or for reorganization, or for the appointment of a receiver
or trustee of all or a portion of Developer's property, or a general assignment by
Developer for the benefit of creditors.
(t) Until both Certificates of Completion have been issued, fIling against
Developer in any court, pursuant to any federal or State statute, of a petition in
bankruptcy or insolvency, or for reorganization, or for appointment of a receiver or
trustee of all. or a portion of Developer's properties, if such proceeding is not
dismissed within 90 days after commencement thereof.
(g) Until both Certificates of Completion have been issued, commencement
by the Holder of any First Mortgage of foreclosure in the event of a default in any of
the terms or conditions of the First Mortgage.
(h) Until both Certificates of Completion have been issued. any merger,
consolidation. liquidation, reorganization or transfer of all or substantially all of
Developer's assets.
.
Section 10.2. Remedies on Default. Whenever any Event of Default occurs, the
HRA, subject to any rights of the Holder of a First Mortgage which has been approved by
the HRA pursuant to Section 8.1 of this Agreement, may take anyone or more of the
following actions (but only if the HRA is not then in default and only after provision of 60
days' written notice which sets forth the nature of the default to Developer in the case of an
Event of Default under Section 10.1(a), (b), (c), or (d), and then only if such an Event of
Default has not been cured within said 60 days or, if such an Event of Default cannot be
cured within 60 days, Developer does not provide assurances to the HRA reasonably
satisfactory to the HRA that such an Event of Default will be cured as soon as reasonably
possible and that it will not jeopardize the purposes of this Agreement and of the Plan):
(a) The HRA may suspend its performance under this Agreement until it
receives assurances from Developer, deemed adequate by the HRA. that Developer
will cure its default and continue its performance under this Agreement.
(b) If the Event of Default occurs prior to the Closing Date and before the
HRA has acquired any of the Development Property, the HRA may cancel and rescind
this Agreement.
.
(c) If the Event of Default occurs prior to the Closing Date, and after the
HRA has acquired all or any part of the Development Property, the HRA shall .
thereupon use reasonable efforts and act in good faith to sell that portion of that
Development Property which it then owns at the best price reasonably obtainable
(provided such sale is permitted by applicable law) and as soon as reasonably possible,
such sale to be on such terms and conditions as the HRA deems reasonable and
appropriate to satisfy the provisions of the Plan. The HRA shall apply the proceeds
of such sale first to reimburse the HRA for all costs and expenses incurred by the
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HRA with respect to the property (less any amount rec~ived by the HRA from any
security provided by Developer) including but not limited to acquisition costs,
remediation costs, taxes, assessments, utility charges, payments made to discharge any
encumbrances or liens, reasonable anorneys' fees and expenses, and second to
reimburse Developer in an amount equal to any security provided by Developer plus
other reasonable acquisition and construction costs incurred by Developer in
connection with the Project including reasonable anorney's architects' and engineers'
fees and expenses with respect to the property, and the balance to be retained by the
HRA.
.
(d) If the Event of Default occurs after Closing Date but prior to issuance
of the Certificate of Completion for a Lot, the HRA may reenter and take possession
of the Lot, revest title to the Lot in the HRA, and exclude Developer from possession
of the Lot. The HRA shall thereupon use reasonable efforts and act in good faith to
sell the Lot at the best price reasonably obtainable (provided such sale is permined by
applicable law) and as soon as reasonably possible, such sale to be on such terms and
conditions as the HRA deems reasonable and appropriate to satisfy the provisions of
the Plan. The HRA shall apply the proceeds of such sale first to reimburse the HRA
for all costs and expenses incurred by the HRA with respect to the Lot (less any
amount received by the HRA from any security provided by Developer and less the
Purchase Price received by the HRA from Developer) including but not limited to
acquisition costs, remediation costs. taxes, assessments, utility charges, payments
made to discharge any encumbrances or liens, reasonable anorneys' fees and
expenses; second to the Holder of a First Mortgage to the extent of the unpaid
mortgage with respect to the Lot; third to reimburse Developer in an amount equal to
the Purchase Price with respect to the Lot, plus the amount of any security paid by
Developer to the HRA, plus other reasonable acquisition and construction costs
incurred by Developer in connection with the Project including architects' and
engineers' expenses with respect to the Lot; and the balance to be retained by the
HRA.
(e) The HRA may initiate such action, including legal or administrative
action, as is necessary for the HRA to secure performance of any provision of this
Agreement or recover any amounts due under this Agreement from Developer or
under the Escrow Agreement or any other security provided by Developer.
(f) Sue for damages, including delinquent taxes levied against the
Development Property, provided that any damages shall be reduced to the extent of
any amount recovered by the HRA under any security provided by Developer.
.
Section 10.3. No Remedv Exclusive. No remedy herein conferred upon or reserved
to the HRA is intended to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition to every other remedy
given under this Agreement or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may be deemed expedient.
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Section 10.4. No Additional Waiver Imolied bv One Waiver. In the event any
agreement contained in this Agreement should be breached by any Party and thereafter
waived by any other Party, such waiver shall be limited to the particular breach so waived
and shall not be deemed to waive any other concurrent, previous or subsequent breach
hereunder.
ARTICLE XI
Additional Provisions
Section 11.1. Equal Emoloyment Ooportunity. Developer agrees that during the
construction of the Project neither it nor any of the contractors will unlawfully discriminate
against any employee or applicant for employment because of race, color. religion, sex, age,
national origin, or political affiliation.
Section 11.2. Not for Speculation. Developer's purchase of the Development
Property, and its undertakings pursuant to this Agreement, are and will be used for the sole
and express purpose of redevelopment of the Development Property and not for speculation
in land holdings.
Section 11.3. Titles of Articles and Sections. Any titles of the several parts, Anicles
and Sections of this Agreement are insened for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions. .
Section 11.4. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand or other communication under the Agreement by either party to
the other shall be sufficiently given or delivered if it is in writing dispatched by registered or
cenified mail, postage prepaid, return receipt requested, or delivered personally; and,
(a) in the case of MEPC, is addressed to or delivered personally to MEPC
at 1550 Utica Avenue South, Suite 120, Minneapolis, Minnesota 55416, Attention:
Regional Vice President, with copies to David C. Sellergren, Doherty, Rumble &
Butler, 3500 Fifth Street Towers, 150 South Fifth Street, Minneapolis, Minnesota
55402; and
(b) in the case of the HRA, is addressed to or delivered personally to the
HRA to Housing and Redevelopment Authority In and For the City of Golden Valley,
7800 Golden Valley Road, Golden Valley, Minnesota 55428, Attention: Director,
with copies to Allen D. Barnard, Best & Flanagan, 4000 First Bank Place, 601
Second Avenue South, Minneapolis, Minnesota 55402-4331.
or at such other address with respect to either such Party as that Party may, from time to
time, designate in writing and forward to the other as provided in this Section.
Section 11.5. Countemans. This Agreement may be executed in any number of
counterpans. each of which shall constitute one and the same instrument.
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Section 11.6. Modification. If the HRA is requested by the Holder of a First
Mortgage or by a prospective Holder of a prospective First Mortgage to amend or
supplement this Agreement, or to subordinate its interest therein, the HRA will, in good
faith, consider the request with a view to granting the same, provided that such request is
consistent with the terms and conditions of the Plan.
Section 11.7. Intemretation and Amendment. This Agreement shall be governed by
and construed in accordance with the laws of the State of Minnesota. This Agreement
constitutes the entire agreement of the Parties on the subject matter hereof, superseding any
prior oral or written agreements. This Agreement can be modified only by a writing signed
by both Parties.
Section 11.8. Severability. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provisions hereof.
Section 11.9. Duration. This Agreement shall be effective as of the date hereof and
shall continue in full force and effect until December 31, 2010 at which time this Agreement
will terminate, except as specifically provided to the contrary herein. This Agreement shall
survive the Closing Date and the HRA's delivery of any Deed to Developer.
.
Section 11.10. Bindinl! Effect. Subject to the provisions of Article IX, this
Agreement is binding upon, and shall inure to the benefit of, the successors and permitted
assigns of the Panies.
Section 11.11. Consents. Any consent or approval required of a Party under this
Agreement shall not be unreasonably withheld or delayed.
Section 11.12. Certificates. Upon reasonable request from time to time, the HRA
shall execute and deliver written certificates to panies designated by Developer concerning
whether this Agreement is in effect, whether any defaults exist under this Agreement and
other similar matters.
ARTICLE xn
Termination of Al!reement
Section 12,1. Develooer's Ootions to Terminate. In addition to any other right to
terminate contained in this Agreement, this Agreement may be terminated by Developer by
written notice to the HRA if Developer is in compliance with all material terms of this
Agreement and no Event of Default by Developer is then existing; and
.
(a) Subject to Section 7.2, the HRA fails to comply with any material term
of this Agreement, and, after written notice by Developer of such failure, the HRA
has failed to cure such non-compliance within 60 days of receipt of such notice. or, if
such non-compliance cannot reasonably be cured by the HRA within 60 days. the
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HRA has not, within 60 days of receipt of such notice, provided assurances,
reasonably satisfactory to Developer, that such non-compliance will be cured as soon
as reasonably possible;
~b) Closing has not occurred by May 1, 1998, unless extended by the
Panies;
(c) If Developer's title objections are not waived by Developer or cured by
the HRA pursuant to Section 3.1;
(d) Subject to Section 2.2(f), if Developer does not receive prior to the
Closing Date all approvals and consents from governmental authorities which are
reasonably required for construction and use of the Improvements;
In the event of a default by the HRA prior to the Closing Date which is caused by the
HRA's failure to pay any amount which it is required to pay under this Agreement,
Developer, in lieu of terminating this Agreement, may pay such amount on behalf of the
HRA and reduce the Purchase Price.
.
Section 12.2. Effect of Termination. Except as provided in Sections 4.4 and 9.2, if
this Agreement is terminated pursuant to this Article XII, this Agreement shall be from such
date forward null and void and of no funher effect; provided, however, that termination of
this Agreement pursuant to this Article XII shall not affect the rights of Developer to institute
any action, claim or demand for damages suffered as a result of breach or default of the
terms of this Agreement by the HRA.
IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly executed
in its name and behalf and its seal to be hereunto duly affIxed and MEPC has caused this
Agreement to be duly executed in its name and behalf, on or as of the date fIrst above
written.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN
VALLEY
By
Its
MEPC AMERICAN PROPERTIES, INC.
.
By
Its
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And
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
1996, by , a of THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, on
behalf of the organization.
Notary Public
.
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
1996, by , , and
, of MEPC AMERICAN PROPERTIES, INC., a Delaware
corporation, on behalf of the corporation.
Notary Public
DRAFTED BY:
Best & Flanagan
4000 First Bank Building
601 Second Avenue South
Minneapolis, Minnesota 55402-4331
CCB\Golden.Agr\40371
.
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EmmIT A
LEGAL DESCRIPTION
Lots 1-9, Block 1, Merchant's Industrial Park, Hennepin County, Minnesota,
according to the recorded plat thereof.
Lots 1 and 2-, Block 1, Merchant's Industrial Park Second Addition, Hennepin
County, Minnesota, according to the recorded plat thereof.
That part of Government Lot 3, unplatted. lying east of Colorado A venue South and
west of the plat of Golden Hills West 2nd Addition.
That ponion of the existing frontage road immediately to the south of the above-
described property which is vacated on or before the Closing Date and which the HRA is
able to acquire title to on or before the Closing Date, subject to reserved. drainage and utility
easements.
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'Solution 96-6
E2
liT B
December 1 .996
.
EXHmIT C
ASSESSMENT AGREEMENT
FOR VALUABLE CONSIDERATION, The Housing and Redevelopment Authority in
and for the City of Golden Valley, Minnesota, a public body corporate established pursuant
to Minnesota Statutes, Section 469.001 et~. (the "HRA"), and MEPC American
Properties, Inc. (the "Developer"), hereby covenant and agree that the following described
property: Lot 1, Block 1, Golden Hills West'Founh Addition, Hennepin County, Minnesota
("Lot 1 It), and Lot 1, Block 2, Golden Hills West Founh Addition, Hennepin County,
Minnesota ("Lot 2"), (collectively the "De\elopment Property"), and the improvements to be
made thereto pursuant to the Third MEPC Private Development Agreement between the
panies dated as of , 1996, (the "Improved Parcel"), with respect to which
any real estate taxes, or taxes in lieu thereof which are levied or assessed and payable by the
Developer, shall be assessed to be of a market value of not less than the following:
(a) For Lot 1, $2,747,500 on January 2, 199~;
.
(b)(i) For Lot 2. $1,726.000 for the office warehouse facility or $1,787,500
for the office building on January 2, 1999, and $3,452.000 for the office
warehouse facility or $3,575,000 for the office building on January 2, 2000, if
Developer does not elect to defer commencement of construction of the
Improvements on Lot 2 pursuant to Section 4.2; or
(b)(ii) For Lot 2, $3,452,000 for the office warehouse facility or $3,575,000
for the office building on January 2, 2000, if Developer elects to defer
commencement of construction of the Improvements on Lot 2 pursuant to
Section 4.2;
increased for all years by the amount of $35.00 for each square foot of office/warehouse
Improvements on Lot 1 in excess of 78,500 square feet, and by (a) $40.00 for each square
foot of office/warehouse Improvements on Lot 2 in excess of 86,300 square feet, or (b)
$55.00 for each square foot of office building Improvements on Lot 2 in excess of 65,000
square feet, and decreased for all years by the fair market value of any portion of the
building improvements taken in condemnation or by the power of eminent domain for which
reconstruction is impracticable as provided in Section 3.9 of the Private Development
Agreement, and by the Developer's cost for any portion of the unimproved Improved Parcel
taken in condemnation or by the power of eminent domain (the "Assessor's Minimum Market
Value").
.
Commencing with taxes payable in the year 2000 and thereafter during the term of
this Assessment Agreement, the Developer shall not seek a reduction of the market value of
the Improved Parcel for property tax purposes below the Assessor's Minimum Market Value
stated above, regardless of actual market values which may result from incomplete
construction of improvements to the Improved Parcel, or from destruction or diminution
C-l
~ ~olution 96-6
EX 'IT B
December l'
396
.
thereof by any cause. insured or uninsured, except in the ca..~ of acquisition or reacquisition
of any ponion of the Improved Parcel by a public entity.
Upon execution by the parties, this Assessment Agreement shall be presented to the
Hennepin County Assessor, or to the Golden Valley City Assessor having the powers of the
County Assessor, if any, pursuant to Minnesota Statutes, Section 469.177, Subd. 8, as
hereafter amended. If this Assessment Agreement is approved and cenified by such Assessor
in the form of attached Exhibit C-l, this Assessment Agreement shall be filed in the office of
the Hennepin County Recorder or in the office of the Hennepin County Registrar of Titles
upon transfer of title of the Development Property from the HRA to the Developer.
The panies hereby covenant and agree that the obligations imposed hereunder shall be
the personal obligations of the panies and shall also be deemed with respect to the
Development Property to be covenants and restrictions running with the land, and shall
constitute burdens and benefits to the HRA and the Developer, their successors, assigns,
grantees and all other parties hereafter owning or holding any interest in the Development
Property or any ponions thereof.
This Assessment Agreement is effective as of the date hereof and shall remain in force
and effect until December 31, 2010.
.
IN WITNESS WHEREOF, the parties have caused the execution of this Assessment
Agreement as of this day of . 19 .
- -
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN Ai~D FOR THE CITY OF GOLDEN
VALLEY
By
Its
MEPC AMERICAN PROPERTIES, INC.
By
Its
And
Its
.
C-2
r olution 96-6
EX' IT B
December 1: 196
.
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
19_, by , the
of THE HOUSING" AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
GOLDEN VALLEY, on behalf of the organization.
Notary Public
.
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN)
The foregoing instrument was acknowledged before me this _ day of
, 19_, by . the , and
. the , of MEPC American
Properties, Inc., a Delaware corporation. on behalf of the corporation.
Notary Public
DRAFTED BY:
Best & Flanagan
4000 First Bank Building
601 Second Avenue South
Minneapolis, "Minnesota 55402-4331
.
C-3
solution 96-6
E 31T B
December.. 1996
.
EXHmIT C-l
ASSESSOR'S CERTIFICATION
The undersigned, being the duly qualified and acting Hennepin County Assessor,
hereby certifies that:
1. He is. the assessor responsible for the assessment of the Development Property
described in the foregoing Assessment Agreement.
2. He has read the foregoing Assessment Agreement;
3. He has received and read a copy of the Private Development Agreement;
.
4. He has received and reviewed the architectural and engineering plans and
specifications for the improvements agreed to be constructed on the
Development Property by MEPC American Propenies. Inc. pursuant to the
Private Development Agreement;
5.
He has reviewed the market value previously assigned to the Development
Property upon which such improvements are to be constructed; and
6. The undersigned assessor, being legally responsible for the assessment of the
above described Development Property upon completion of the improvements
to be constructed thereon, hereby cenifies that the market value assigned to the
Improved Parcel (as defmed in the Assessment Agreement) and the
improvements thereto upon completion shall not be less than the following:
(a) For Lot 1, $2,747,500 on January 2, 1999;
(b)(i) For Lot 2, $1,726,000 for the office warehouse facility or $1,787,500
for the office building on January 2, 1999, and $3,452,000 for the office
warehouse facility or $3,575,000 for the office building on January 2, 2000, if
Developer does not elect to defer commencement of construction of the
Improvements on Lot 2 pursuant to Section 4.2 of the Development
Agreement; or
(b)(ii) For Lot 2, $3,452,000 for the office warehouse facility or $3,575,000
for the office building on January 2, 2000, if Developer elects to defer
commencement of construction of the Improvements on Lot 2 pursuant to
Section 4.2 of the Development Agreement;
.
increased for all years by the amount of $35.00 for each square foot of office/warehouse
Improvements on Lot 1 in excess of 78,500 square feet, and by (a) $40.00 for each square
foot of office/warehouse Improvements on Lot 2 in excess of 86.300 square feet. or (b)
C-4
,. ~olution 96-6
EX liT B
December 1.
396
.
$55.00 for each square foot of office building Improvements on Lot 2 in excess of 65,000
square feet, and decreased for all years by the fair market value of any ponion of the
improvements taken in condemnation or by the power of eminent domain for which
reconstruction is impracticable, and by the cost for any unimproved ponion of the Improved
Parcel taken in condemnation or by the power of eminent domain.
Dated
,19_,
Hennepin County Assessor
Hennepin County, Minnesota
.
.
C-5
r 'olution 96-6
EX 'IT B
December l'
396
.
EXHIBIT D
CERTIFICATE OF COMPLETION
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF GOLDEN VALLEY, a public body corporate (the "HRA"), and MEPC AMERICAN
PROPERTIES, INC. a Delaware corporation ("Developer"), previously entered into the
Third MEPC Private Development Agreement (the "Agreement"), recorded in the Office of
the County Recorder in and for the County of Hennepin and State of Minnesota, as
Document Number , for the following described property:
Lot 1, Block 1, and Lot 1, Block 2 Golden Hills West Fourth Addition, Hennepin
County, according to the recorded plat thereof.
.
The Agreement contains cenain covenants which. if not performed by Developer. or
its successors and assigns. would result in a forfeiture and right of re-entry by the HRA. its
successors and assigns. As of the date hereof. Developer has performed all of such
covenants contained in the Agreement to the satisfaction of the HRA. including the covenants
in Anicle IV of the Agreement requiring completion of the construction of the
improvements.
NOW, THEREFORE, it is hereby cenified that all of the covenants in the Agreement.
including the covenants in Anicle IV requiring completion of the construction of the
improvements, have been duly and fully performed by Developer as of the date hereof and
that the provisions for forfeiture of title and right to re-entry by the HRA for breach of such
covenants, and the escrow agreement securing performance thereof, are hereby released
absolutely and forever insofar as they apply to the property described above. The County
Recorder in and for the County of Hennepin and State of Minnesota is hereby authorized to
accept for recording and to record the fIling of this instrument. This instrument shall be
conclusive determination of the satisfactory termination of the covenants of Anicle IV of the
Agreement requiring completion of the construction of the improvements. Notwithstanding
the foregoing, the remaining covenants contained in the Agreement remain in full force and
effect.
.
D-1
r 'olution 96-6
.
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
EX' IT B
December 1: 396
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN
VALLEY
By
Its
And
Its
The foregoing instrument was acknowledged before me this _ day of , 19_,
by and , respectively the
and of The Housing and Redevelopment Authority in and for the City of
Golden Valley, on behalf of the Authority.
.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Best & Flanagan
4000 First Bank Building
601 Second Avenue South
Minneapolis, Minnesota 55402-4331
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ll.ildilg Neal 86.362 SF
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ll~'::"l:-~,~ S......
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&.6111I) Blended Perking Ratio
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AiIISF :l I'F\IFI lJlM:Nl.:l STIRY IR=K:J;
Lot 2. Gold"" HIs 'Ih Addilan
Lot Area. 7.] Acres
&.oild~ Areo. 65.000 SF
MJ.. &.oi~ Coverage Per Z'!!'9' '01 1
lt~~~CoWr~t ,..71] Slaries
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YAAl SFnunc~ IEllD. IBI'l.lEll
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PA/lKNl ~Otll_rs.
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001 Ollice . UDXI . 260 ear.
Park~ Provided' 6'8 Cars
Parki-og Ralio. 1lIDX1
IAN1C:l"APN; Rr=(I~
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65 Trees ~ed.
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lol Area' 7.3 Acrn
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r olution 96-6
.
EX ITS
December 1 ~ J96
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'iolution 96-6
E> JlT B
December 1. .996
elution 96-6
EX IT B
December 1',. J96
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A3.4
".011
.
solution 96-6
E'
BITS
December " 1996
.
EXHmIT F
DEMOLmON SPECIFICATIONS
The professional wrecking by a licensed contractor of any buildings. structures, tanks
or manmade objects. It consists of the removal of all hazardous/toxic waste materials from
site (other than materials in the soil or groundwater) to a licensed landfIll area (licensed in
the disposal of toxic waste materials) prior to demolition work.
All work shall be complete and include the capping or removal of existing utilities,
except those to be relocated. and the wrecking and removal of all footings, foundations, floor
slabs, subsurface tanks, buried utility lines sized in excess of 6" in diameter, steps, stoops,
private sidewalks, site lighting poles, driveways and provide for a clean compacted (95 %
Proctor Density) granular type fill in all excavations resulting from demolition.
All piping, heating plants. fuel storage tanks. appliances and other debris shall be
removed from site to a licensed landfill area.
.
All work shall be performed in conjunction with State. City andlor local ordinances
and reasonable restrictions.
.
F-l
.
.
.
r olution 96-6
EX
ITB
December 1'/. .J96
EXHmrr G
LIMITED WARRANTY DEED
FOR VALUABLE CONSIDERATION, THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate
created pursuant to Minnesota Statutes, Section 469.001 et~. ("Grantor"), hereby grants,
bargains and conveys to MEPC American Propenies, Inc. a Delaware corporation,
("Grantee"), real propeny in Hennepin County, Minnesota, described as follows (the
"Propeny"):
Lot 1, Block 1, and Lot 1, Block 2, Golden Hills West Fourth Addition, Hennepin
County, according to the recorded plat thereof.
together with all hereditaments and appunenances belonging thereto. Grantor. for itself and
its successors and assigns. hereby covenants with Grantee and its successors and assignS, that
it has not made. done. executed. or suffered any act or thing whatsoever whereby the
Propeny, or any pan thereof, now or at any time hereafter. shall or may be imperiled.
charged or encumbered in any manner whatsoever. except for any covenants. conditions. or
restrictions contained in the Golden Hills Redevelopment Plan adopted by Grantor in 1984,
as amended (the "Plan"), and any covenants, conditions, or restrictions contained in the
Third MEPC Private Development Agreement dated , 1996, between Grantor
and Grantee or Grantee's assignor (the "Agreement").
Provided:
1. It is understood and agreed that this Deed is subject to the restrictions,
reservations and encumbrances of record. if any, all building and zoning laws and
ordinances. all other local, state and federal laws and regulations, and the covenants.
conditions, restrictions and provisions of the Agreement. It is also understood and agreed
that, prior to December 31, 2010, Grantee shall not sell, transfer, mongage or otherwise
convey the Propeny, or any pan thereof or interest therein, except as permitted by the
Agreement.
Grantee hereby covenants and agrees to begin and diligently prosecute to completion
the development of the Propeny at such times and as otherwise provided in the Agreement.
Promptly after completion of the Improvements (as defmed in the Agreement) in accordance
with the Agreement. Grantor will furnish Grantee with a Certificate of Completion. as
provided in the Agreement. which shall be the conclusive determination of satisfaction and
termination of the agreements and covenants in and pursuant to the Agreement with respect
to the obligations of Grantee to construct the Improvements. and the dates for the
commencement and completion thereof.
2. If an "Event of Default" by Gr~ntee, as defmed in Section 10.1 of the
Agreement, which is not cured within the period provided in Section 10.2 of the Agreement.
exists prior to the recording of the Cenificate of Completion. then Grantor shall have the
G-1
solution 96-6
E
31TB
December.. /996
.
right to re-enter and take possession of the Property and to terminate and revest in Grantor
the estate conveyed by this Deed to Grantee, as specified in the Agreement.
3. Grantee hereby agrees to do the following:
(a) Maintain insurance of such types and amounts as specified in Article VI
of the Agreement;
(b) Pay all real estate taxes and special assessments on the Property when
. due and not seek or cause a reduction in such taxes, except as permitted
under the Agreement;
(c) Devote the Property to only such uses as are permitted under the
Agreement.
The parties agree that the covenants contained in this Section shall terminate on
December 31, 2010.
.
4. There shall be no discrimination in the use of the Property by Grantee on
account of race, color, religion. sex, age, national origin. or political affiliation during the
period that the Plan remains in effect.
The parties agree that all of the covenants and restrictions contained in this Deed shall
be binding upon Grantee, its successors and assigns, for the maximum benefit of Grantor, its
successors and assigns, and shall also be deemed to run with the land.
IN WITNESS WHEREOF, Grantor has caused this Deed to be duly executed on its
behalf by its duly authorized representatives this _ day of , 19 .
mE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
GOLDEN VALLEY
By
Gloria Johnson
Its Chair
By
William S. Joynes
Its Director
.
G-2
')olution 96-6
EJ JlT B
December 1 ,996
.
\STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of , 19 ,
by Gloria Johnson and William S. Joynes, respectively the Chair and Director of The
Housing and Redevelopment Authority in and for the City of Golden Valley, on behalf of the
Authority .
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
.
Best & Flanagan
4000 First Bank Building
601 Second A venue South
Minneapolis. Minnesota 55402-4331
.
G-3
0-
lolution 96-6
E>' liT B
December 1
996
.
EXHIBIT H
POND EASEMENT AGREEMENT
1. In consideration of the payment to the Housing and Redevelopment Authority
in and for the City of Golden Valley (the "HRA"), by MEPC American Propenies, Inc., a
Delaware corporation ("MEPC"), of the sum of One Dollar and Other Good and Valuable
Consideration, the HRA hereby grants to MEPC a nonexclusive easement (the "Easement"),
for the benefit of Lot 1, Block 1, and Lot 1, Block 2, Golden Hills West Founh Addition, to
connect to and use the stormwater retention pond located on Lot 1, Block 2, Golden Hills
West Third Addition (the "Property").
2. MEPC's use of the Easement shall be only for the purposes set fonh herein,
and shall not interfere with the HRA' s ownership of the Property or its use or maintenance
of the pond on the Propeny. MEPC shall pay all of the costs associated with the Easement,
including the cost of making and maintaining any connections from the benefitted property to
the pond on the Propeny. The location of any such connection shall be subject to approval
by the City Engineer.
.
3. This Easement shall become effective at such time as the HRA becomes the fee
owner of the Propeny.
4. This Agreement shall be binding upon, and inure to the benefit of, the HRA,
MEPC and their respective successors and assigns.
5. This Agreement constitutes the entire agreement between the parties on the
subject matter hereof, superseding any prior oral or written agreements. This Agreement can
only be amended in writing. This Agreement shall be governed by Minnesota law.
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF GOLDEN
VALLEY
By
Its
And
Its
.
H-l
solution 96-6
E: BIT B
December " 1996
.
STATE OF MINNESOTA )
) 55.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _ day of
19_, by and , the
and of THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF GOLDEN VALLEY, a public body corporate and politic,
under the laws of Minnesota, on behalf of the Authority.
Notary Public
.
.
H-2
)olution 96-6
E)
llTB
December 1 .996
.
EXHIBIT I
GUARANTY
FOR VALUABLE CONSIDERA nON, and to induce THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN V ALLEY (the
"HRA") to extend credit and other accommodations to MEPC American Propenies, Inc., a
Delaware corporation ("Developer"), MEPC pIc, an English corporation ("Guarantor"),
hereby guarantees to the HRA the full and prompt performance, when due. of all covenants,
agreements, and obligations of Developer under the Third MEPC Private Development
Agreement dated as , 1996 (the "Development Agreement"), and the
Assessment Agreement related thereto (the "Assessment Agreement").
This Guaranty is absolute, unconditional, continuing and irrevocable. This Guaranty
is effective upon delivery to the HRA without acceptance by the HRA and without any
further act or condition.
.
Guarantor waives notice, demand and opponunity to cure any default by Developer.
and any and all defenses. claims and setoffs of Developer. The liability of Guarantor
hereunder shall not be affected by any extensions, renewals, modifications. waivers. or
releases granted to Developer, or by any other act or thing other than performance in full by
Developer under the Development Agreement and the Assessment Agreement.
Guarantor shall payor reimburse the HRA for all costs and expenses (including
reasonable attorneys' fees and expenses) incurred by the HRA in enforcement of this
Guaranty. Guarantor shall not exercise or enforce any right of payment, reimbursement or
subrogation available to it against Developer during any period in which there is a default
under the Development Agreement. or the Assessment Agreement.
This Guaranty shall be binding upon Guarantor and its successors and assigns and
shall inure to the benefit of the HRA and its successors and assigns. This Guaranty may not
be waived, modified, terminated or otherwise changed except by a writing signed by the
HRA.
This Guaranty shall be governed by the laws of the State of Minnesota. Any dispute
or claim arising under this Guaranty shall be venued exclusively in Minnesota District Court,
Hennepin County, and Guarantor hereby consents to the jurisdiction of such court for all
such matters. Guarantor also agrees that process may be served on Guarantor by service on
any officer of Developer, in addition to any other method permitted by law.
This Guaranty shall terminate at such time as the Certificate of Completion has been
issued as provided in Section 4.3 of the Development Agreement.
.
1-1
1olution 96-6
E>' lIT B
December 1
996
.
IN WITNESS WHEREOF, Guarantor has caused the execution of this Guaranty this
_day of ,19_.
MEPC pIc
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On this _ day of , 19 , , a of MEPC pIc.
personally appeared before me and acknowledged that he executed the foregoing instrument
on behalf of the corporation.
.
Notary Public
.
1-2
solution 96-6
E 31T B
December \ 1996
.
EXHmIT J
GRANT OF EASEMENT
(Access Driveway and Signage)
THIS GRANT OF EASEMENT is made and entered into as of the _ day of
,1996, by AND BETWEEN MEPC AMERICAN PROPERTIES, INC.,
a corporation under the laws of the State of Delaware (hereinafter "Grantor"), and
CHRISTIANSON & TORGERSON PARTNERSHIP, L.L.P., a limited liability partnership
under the laws of the State of Minnesota (hereinafter "Grantee").
WHEREAS, Grantor is the fee owner of the certain real property located in the City of
Golden Valley, County of Hennepin and State of Minnesota, legally described on "Exhibit
A" attached hereto and incorporated by this reference (the "Burdened Property").
.
WHEREAS. Grantee is the fee owner of certain real property located in the City of
Golden Valley, County of Hennepin and State of Minnesota, legally described on "Exhibit B"
attached hereto and incorporated by this reference (the "Benefitted Propeny").
WHEREAS, Grantee has sought to obtain from Grantor an easement through, over,
under and across a ponion of the Burdened Property for the purpose of providing ingress and
egress between the Benefitted Property and Colorado A venue in the City of Golden Valley,
Minnesota.
WHEREAS. the City of Golden Valley has required such ingress and egress for
purposes of maintaining two routes for emergency vehicles to access the Benefitted Propeny.
WHEREAS, Grantor has agreed to Grantee's request for such easement, subject to the
terms and conditions herein.
NOW, THEREFORE. for $1.00 and in consideration of the above recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
.
1. Grant of Easement. Grantor hereby grants and conveys to Grantee, its successors
and assigns, a nonexclusive easement (the "Easement") for the purpose of providing ingress
and egress between the Benefitted Property and Colorado A venue, over and across that
ponion of the Burdened Property as described on "Exhibit C" and depicted on "Exhibit D"
attached hereto (the "Easement Area"). The Easement shall run with and burden the title to
the Burdened Property and shall inure to the benefit of and be binding upon the panies hereto
and their respective heirs, representations, successors and assignors, including without
limitation, all subsequent owners of the Burdened Property and all persons or entities
claiming under them.
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.
.
.
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EX
;ITB
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2. Use of Easement Area. Grantee agrees that the Easement Area will be used for
ingress and egress, and directional signage in the area depicted on "Exhibit D," purposes
only. Grantee agrees that its use of the Easement Area will not interfere with improvements
to the real property, parking access and circulation patterns which are reasonably necessary
and convenient for the use of the Burdened Property and Grantor's building located thereon.
The directiOnal signage may not be constructed without Grantor's written approval of the
sign height, size, design, and illumination, which approval shall not unreasonably be
withheld.
3. Maintenance and Reoair of Easement Area. Grantor shall repair and maintain,
including snow plowing, the Easement Area in a manner consistent with its operational
needs. If Grantor reasonably determines that Grantee's use of the Easement Area has
increased the costs of said repair and maintenance, Grantor shall determine the reasonable
amo'~nt of said costs, inform Grantee of the amount of said costs, and Grantee shall pay such
costs within thirty (30) days after receipt of such information from Grantor.
4. Notices. All notice provided for in this Grant of Easement shall be effective on
the date of mailing of such notice in writing and sent by registered or certified mail. Subject
to change by notice from the party to be charged with such notice. notices to Grantor shall
be addressed as follows:
MEPC American Properties. Inc.
Notices to Grantee shall be addressed as follows:
Christianson & Torgerson Partnership, L.L.P.
s. _ Indemnitv. Grantee shall indemnify and hold Grantor and any persons or entities
owned or controlled by or affiliated with Grantor harmless for any and all liabilities
(including reasonable attorneys' fees) arising out of claims by third parties relating to acts or
occurrences on, at or with respect to this Grant of Easement. Grantee, at its expense, shall
provide and keep in force at all times, comprehensive liability insurance against this
contractual indemnity and claims for injury, death or property damage occurring on. in or
about the Easement Area with a minimum combined limit of liability of Three Million
Dollars ($3,000,000). Such policy shall provide for at least thirty (30) days notice to
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.
Grantor before cancellation or material change. A copy of such policy shall be delivered to
Grantor along with evidence of payment of the premiums required.
6. Govemine Law. This Grant of Easement is made and executed under, and in all
respects is to be given and construed by, the laws of the State of Minnesota.
7. Counten;>arts. This Grant of Easement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
.
8. Termination. If (1) Grantor reasonably determines that Grantee's use of the
Easement Area interferes with Grantor's use of the Burdened Propeny as described in
Section 2, or (2) Grantee does not promptly pay its share of costs as required in Section 3,
then Grantor may terminate this Grant of Easement by thiny (30) day's written notice of the
same to Grantee. Grantor may not exercise this termination right pursuant to clause (1)
herein unless it fIrst provides written notice to Grancee of the nature of Grantee's interference
and provides Grantee thiny (30) days to eliminate the interference. Any such termination
shall not affect the right of the City to use the Easement Area for emergency vehicles for
ingress and egress to the BenefItted Propeny, which right is granted hereby and shall be
continuing.
9. Entire Aereement. This Grant of Easement constitutes the entire agreement
between the parties. There are no verbal agreements that change this Grant of Easement and
no waiver of its terms will be effective unless in writing and executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Grant of Easement as of
the day and year fIrst above written,
Grantor
MEPC AMERICAN PROPERTIES, INC.,
a Delaware corporation
By
Its
..
STATE OF MINNESOTA )
) ss.
COUNTY OF )
.
The foregoing instrument was acknowledged before me this _ day of
, 1996, by , a
of MEPC AMERICAN PROPERTIES. INC., a duly authorized corporation under the laws
of the State of Delaware, on behalf of the corporation.
Notary Public
J-3
olution 96-6
EX
ITS
December 1'. 396
.
Grantee
CHRISTIANSON & TORGERSON PARTNERSHIP,
L.L.P.
a Minnesota limited liability
pannership
By
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this ~ day of
. 1996. by . the
of CHRISTIANSON & TORGERSON PARTNERSHIP, L.L.P., a limited liability pannership
under the laws of the State of Minnesota. on behalf of the limited liability partnership.
.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Doherty, Rumble & Butler, P.A. (DCS)
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4235
.
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EXHIBIT J-I
Legal Description Burdened Property
Lot I, Block 2, GOLDEN HILLS WEST 4th ADDITION, according to the recorded plat
thereof, Hennepin County, Minnesota.
EXHmIT J-2
Legal Description Benefitted Property
.
Lot I, Block I, GOLDEN HILLS WEST 2ND ADDITION, according to the recorded plat
thereof, Hennepin County, Minnesota.
EXHmIT J-3
Legal Description Easement Area
EXHmIT J-4
Drawing of Easement Area
.
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EXHmIT K
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into this _ day
of , 19 ,by and among First Bank St. Paul (the "Bank"), MEPC American
Propenies, Inc., a Delaware corporat:.)n (the "Developer"), and The Housing and
Redevelopment Authority in and for the City of Golden Valley (the "HRA").
The Developer and the HRA have agreed to enter into the Third MEPC Private
Development Agreement (the "Development Agreement"), a copy of which is attached hereto.
Section 4.5 of the Development Agreement requires the Developer to provide security for the
performance of its obligations under the Development Agreement. The Developer is providing
such security pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and in consideration of the
muwal covenants and promises contained herein. the parties agree as follows:
.
1. In compliance with Section 4.5 of the Development Agreement, the Developer
hereby deposits with the Bank the sum of $2,000.000 in cash or cashier's or cenified check (the
"Escrow Account"), which shall be held and administered by the Bank as an escrow security
deposit in accordance with this Agreement. The amount in the Escrow Account may be
increased to up to $10,000,000 upon the HRA's written direction to the Bank and the
Developer's payment of the amount of the increase pursuant to Section 4.5 of the Development
Agreement. The amouIlt in the Escrow Account shall be reduced, and the amount of the
reduction paid by the Bank to Developer. upon the HRA's wrinen direction to the Bank
following any of the events described in Section 4.5 of the Development Agreement which allow
a reduction.
2. The purpose of this Agreement is to secure performance by the Developer of its
obligations under the Development Agreement. Upon delivery to the Bank by the Director of
the HRA of a signed and acknowledged statement in compliance with this paragraph, the Bank
shall fonhwith deliver to the HRA, in cash or by cashier's or cenified check, an amount equal to
the full value of the Escrow Account, less accrued net income payable to the Developer pursuant
to paragraph 6, as of the date of the Bank's receipt of the notice. The acknowledged statement
from the HRA shall recite each of the following applicable elements:
(a) One or more of the following Events of Default described in Section 10.1
of the Development Agreement has occurred and the specific Event of Default is
identified:
(i) Failure by the Developer to pay the Purchase Price or otherwise
perform on the Closing Date;
.
(ii) After the Closing Date and until the Cenificate of Completion has
been issued (as defmed in the Development Agreement). failure by the Developer
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to timely pay all real property taxes. assessments or other charges assessed with
respect to the Development Property;
(iii) Subject to Unavoidable Delays (as defmed in the Development
Agreement), and any extensions of time agreed to by the Developer and the HRA.
failure by the Developer to commence and complete construction of the
Improvements (as defmed in the Development Agreement) pursuant to the terms,
conditions and limitations of the Development Agreement;
. (iv) Until the Cenificate of Completion has been issued, failure by the
Developer to observe or perform any material covenant, condition, obligation or
agreement on its pan to be observed or performed under the Development
Agreement;
(v) Until the Cenificate of Completion has been issued. fIling by the
Developer in any coun, pursuant to any federal or state statute, of a petition in
bankruptcy or insolvency, or for reorganization. or for the appointment of a
receiver or trustee of all or a ponion of the Developer's property, or an
assignment by the Developer for the benefit of creditors;
.
(vi) Until the Cenificate of Completion has been issued, fIling against
the Developer in any coun. pursuant to any federal or state statute, of a petition in
bankruptcy or insolvency, or for reorganization, or for the appointment of a
receiver or trustee of all or a ponion of the Developer's properties, if such
proceeding is not dismissed within 90 days after commencement thereof;
(vii) Until the Cenificate of Completion has been issued, commencement
by the Holder of any First Mongage (as defmed in the Development Agreement)
of foreclosure in the event of a default in any of the terms or conditions of the
First Mongage;
(viii) Until the Cenificate of Completion has been issued. any merger,
consolidation, liquidation, reorganization or transfer of all or substantially all of
the Developer's assets; .
(b) Such Event of Default has not been cured after notice and within the time
provided by Section 10.2 of the Development Agreement; and
(c) The HRA is not then in default under the Development Agreement.
At such time as the HRA delivers to the Bank the statement required under this paragraph, it
shall deliver a copy of such statement to the Developer.
.
3. Upon delivery by the Developer of the Cenificate of Completion provided for in
Section 4.3 of the Development Agreement, the Bank shall distribute the balance of the Escrow
Account to the Developer. The Bank shall also distribute the balance of the Escrow Account to
the Developer upon the Bank's receipt of a signed. written statement or statements from the
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Developer and the HRA that the Development Agreement has been tenninated by the HRA or
the Developer prior to the Closing Date without an Event of Default by the Developer.
4. The Escrow Account shall be invested only in accounts or instruments in which
there is no risk of loss of principal and from which amounts may be withdrawn at any time
without any penalties or charges.
5. The Developer and the HRA hereby designate the Bank as escrow agent pursuant
to this Agreement. The Developer agrees to pay all of the Bank's fees in accordance with
attached Exhibit A.'
6. All interest and income earned on the Escrow Account shall be paid quanerly,
after subtraction by the Bank of any accrued expenses, to the Developer.
7. The HRA and the Developer agree that this Agreement shall in no way infringe on
or restrict the rights of the parties under the Development Agreement.
.
8. The Bank is not a party to nor bound by any instrument other than this Agreement
and shall not be required to take notice of any default or any other maner, nor be bound by, nor
be required to give any notice or demand, nor be required to take any action whatsoever except
as provided in this Agreement.
9. This Agreement shall be effective on the date it is executed by the parties hereto
and shall remain in full force and effect until the entire Escrow Account shall have been
distributed pursuant to this Agreement.
10. The Developer hereby agrees to indemnify and hold harmless the Bank from and
against all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any
other expenses, fees, or charges of any character or nature, which the Bank may incur or with
which the Bank may be threatened by reasons of its acting as escrow agent under this
Agreement. Notwithstanding the foregoing, it is specifically understood and agreed that, in the
event the Bank is found guilty of gross negligence or willful misconduct or malfeasance in the
exercise of its responsibilities hereunder, the indemnification provisions of this Agreement shall
not apply.
11. The Bank shall otherwise not be liable for any mistakes of fact or for any acts or
omissions of any kind unless caused by its willful misconduct or gross negligence.
.
12. The Bank may resign upon 30 days' advance written notice to the parties to this
Agreement. If a successor escrow agent is not appointed within such 30-day period, the HRA
and the Developer may appoint as successor a commercial, bank located in Hennepin or Ramsey
County, Minnesota, having capital of at least $50 million or petition any coun of competent
jurisdiction to name a successor. If no successor can be found using the above procequres, the
Developer shall replace the Escrow Account with a letter of credit in favor of the HRA in the
amount then in the Escrow Account, subject to reasonable terms which are usual and customary
for the type of obligations of the Developer under the Development Agreement.
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13. The Bank may employ such legal counsel and other expens as it considers
necessary for proper advice in connection with this Agreement and shall incur no liability with
respect to any action taken or omitted in good faith upon the advice of such counselor in the
exercise of its best judgment or in accordance with any notices, requests, waivers, consents,
instructions and other papers and documents which it believes to be genuine, authorized or
conforming.
14. The Bank shall not be bound by the provisions of any other agreement heretofore
or hereafter made between or among any of the Developer, or the HRA or any other persons or
of any other agreement to which the Bank is hot a signatory party.
15. In the event of a dispute with reference to the Escrow Account, the Bank, at its
option, may disregard any and all notices and instructions given by any person and suspend the
performance of its obligations set forth in this Agreement and may retain the Escrow Account,
pending the resolution of the dispute by fInal order of a court or in any other manner satisfactory
to the Bank. The Bank shall be entitled to rely on any "fInal order, judgment or other legal
process which it believes to be genuine and binding upon it. This Agreement is for the mutual
benefIt of the Developer and the HRA and may not be modifIed or terminated except as provided
herein or except by a writing signed by them and by the Bank.
.
16. All notices and other communications hereunder shall be in writing and shall be
either personally delivered or sent by registered or certifIed mail, or by facsimile with original to
follow by registered or certifIed mail, as follows:
(a) To Bank:
(b) To HRA:
Golden Valley HRA
Attention: William S. Joynes, Director
7800 Golden Valley Road
Golden Valley, MN 55427
Copy to:
Allen D. Barnard
Best & Flanagan
4000 First Bank Place
601 Second Avenue South
Minneapolis, MN 55402
.
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December 1i J96
.
(c) To Developer:
MEPC American Properties, Inc.
Attention: Regional Vice President, Development
1550 Utica Avenue South
Suite 120
Minneapolis, MN 55416
Copy to:
David C. Sellergren
Doheny, Rumble & Butler
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402
17. This Agreement shall be interpreted in accordance with Minnesota law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year fIrst above written.
.
FIRST BANK ST . PAUL
By
Its
MEPC AMERICAN PROPERTIES, INC.
By
Its
And
Its
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOP. THE CITY OF GOLDEN
VALLEY
.
By
Its
40371
T('_~